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How State Taxes Put a Bigger Pinch on the PoorLife Partners Holdings (NASDAQ: LPHI) operates
in the secondary market for life insurance. It facilitates "life settlements" transactions, which enable policyholders to sell their policies at a discount for an immediate cash settlement. Company revenues derive from fees charged for this service. The business model involves real assets with inherent value and is not tied to the credit market.
Life Partners pleased investors earlier in the week, when it guided Q1 EPS to about 52 cents and Q1 revenues to about $24.4 million. The Street had been expecting 44 cents and $19.5 million. The firm attributed success to continued growth in the life settlements industry, noting that it had been the "best quarter" in company history.
The stock
popped into a bullish "flag" consolidation pattern on the news. Prices frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.
The brokerage community recommends the issue with one "buy" and expects a 28% growth rate through the next year. The LPHI P/E ratio (14.18), Sales Growth rate (37.74%), EPS Growth rate (32.77%), Operating Margin (76.53%), Net Profit Margin (50.47%), Return on Assets (68.23%), Return on Investment (97.38%), Return on Equity (100.02%), Revenue per Employee ($1.00M) and Net Income per Employee ($507.00k) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 13% of the outstanding shares. Over the past 52 weeks, the stock has traded between $12.07 and $42.32. A stop-loss of $20.85 looks good here. Note that the company is expected to report fiscal Q1 results on July 10th.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com. He does not hold a position in the stock discussed above.
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