I’m all the time looking out for hidden gems within the FTSE. Just lately, my consideration has been drawn to IntegraFin (LSE:IHP), an organization that’s been making waves within the monetary companies sector.

With the shares hovering by almost 50% previously 12 months, I can’t assist however marvel, have I missed the boat on this FTSE firm?

A fantastic 12 months

IntegraFin, which offers an funding platform for UK monetary advisers and their purchasers, has definitely had a great 12 months. Not solely has its 46.9% return comfortably outperformed the broader UK market during the last 12 months, but it surely’s additionally left its Capital Markets business friends within the mud, with the sector averaging a 16.3% return.

This stellar efficiency could have gone underneath the radar for a lot of. The corporate’s been persistently rising its earnings at a median annual price of three.5% and boasts a formidable return on fairness of 27.4%. With web margins of 37.7%, the agency’s clearly doing one thing proper in a aggressive business.

The basics

Digging deeper into the financials, there’s quite a bit to love right here. The corporate sports activities a rock-solid steadiness sheet with zero debt, giving it important monetary flexibility in a interval of excessive rates of interest and common uncertainty. Its newest reported earnings confirmed EPS of £0.074 for the primary half of 2024, up from £0.067 in the identical interval final 12 months.

Furthermore, IntegraFin’s income has been rising at a median price of 8% a 12 months, outpacing its earnings development. This might recommend that the corporate’s investing closely in development, which I just like the sound of.

Am I too late?

With such a robust efficiency, it’s pure to marvel if one of the best beneficial properties are already behind us. Nonetheless, there are a number of elements that recommend IntegraFin may nonetheless have room to run.

Regardless of the current price surge, the shares are buying and selling at a price-to-earnings ratio (P/E ratio) of 21.9 instances, which isn’t excessively excessive for an organization with its development profile and market place.

Analysts forecast earnings to develop by 8.78% a 12 months, indicating continued optimism concerning the firm’s prospects. IntegraFin affords a decent 2.9% dividend yield, which is properly coated by earnings with a 65% payout ratio. This implies room for dividend development.

As an funding platform supplier, IntegraFin is properly positioned to profit from the rising development of digitisation in monetary companies.

Dangers

After all, no funding is with out dangers. The enterprise operates in a really aggressive business, and its success has probably attracted the eye of bigger gamers.

Latest regulatory modifications within the monetary companies business might additionally severely influence the enterprise mannequin, and any financial downturn might have an effect on the demand for funding companies.

To me although, the large concern is that the shares are already overvalued. A Discounted Money Circulation (DCF) suggests the present price is about 6% above honest worth. Clearly, this isn’t a assure, but it surely doesn’t encourage me that there’s enormous potential, regardless of what some analysts are forecasting.

I’m staying away

So have I missed the boat on IntegraFin? Maybe not totally. This FTSE firm appears to have the wind in its sails and, for buyers keen to climate potential storms, it would nonetheless supply an attention-grabbing voyage.

Nonetheless, I feel there are in all probability extra profitable investments on the market, with much less danger. I’ll be steering clear for now.