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Growth Portfolio: Steadfast Group Limited (ASX: SDF)


Published 16-MAR-2016 00:00 A.M.


1 minute read

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Overview: Steadfast Group Ltd ("Steadfast", "the Company") is an Australian Company focused on insurance. Steadfast represents a network of over 343 insurance broking firms and 22 underwriting agencies throughout Australia and New Zealand; providing collective purchasing power, software, and support services. The Steadfast network has generated a gross written premium ("GWP") of $4.4billion in 2015.

Catalysts: The consolidated group has witnessed double-digit GWP growth over the last five years, and is on course to generate its 3rd consecutive year of earnings per share growth. Steadfast has consistently expanded its broker and agency network, and recent acquisitions are starting to materialise. Further consolidation of the Steadfast broker network and exposure to premium trends stand as the primary share price drivers.

Hurdles: The company has witnessed two years of premium price contraction and there is no guarantee that the trend will reverse. The bulk of recent growth has arisen from acquisitions and there is no guarantee the company can continue to fund and execute transactions that deliver shareholder value.

Investment View: Steadfast offers profitable exposure to the insurance sector. GWP and earnings per share growth trends are attractive, while management has successfully integrated acquisitions to date. However, there is no guarantee that equity acquisitions will continue to yield economic benefits nor that premium price contraction won’t continue. The Company is well-positioned to take advantage of any cyclical recovery in domestic insurance markets. We are attracted to its market position and initiate coverage with a "buy" recommendation.


General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

Conflicts of Interest Notice

S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

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The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.

Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.

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