Yahoo Finance Is Fiducian Group Limited (ASX:FID) A Strong Financials Bet?
Fiducian Group Limited (ASX:FID), a AU$135m small-cap, operates in the capital markets industry, which has been simplifying their business and operating models over the last few years, both for economic reasons and to reduce organizational complexity. Financial services analysts are forecasting for the entire industry, a strong double-digit growth of 19% in the upcoming year , and a massive growth of 62% over the next couple of years. This rate is larger than the growth rate of the Australian stock market as a whole. Below, I will examine the sector growth prospects, and also determine whether Fiducian Group is a laggard or leader relative to its financial sector peers.
View our latest analysis for Fiducian Group
What’s the catalyst for Fiducian Group’s sector growth?
The threat of disintermediation in the capital markets industry is both real and imminent, taking profits away from traditional incumbent financial institutions. In the past year, the industry delivered growth in the twenties, beating the Australian market growth of 11%. Fiducian Group is neither a lagger nor a leader, and has been growing in-line with its industry peers at around 22% in the prior year. Furthermore, analysts are expecting the company to continue to grow with its industry peers and deliver a 18% growth next year.
Is Fiducian Group and the sector relatively cheap?
The capital markets industry is trading at a PE ratio of 14.74x, relatively similar to the rest of the Australian stock market PE of 16.14x. This illustrates a fairly valued sector relative to the rest of the market, indicating low mispricing opportunities. Furthermore, the industry returned a similar 12% on equities compared to the market’s 12%. On the stock-level, Fiducian Group is trading at a PE ratio of 14.99x, which is relatively in-line with the average capital markets stock. In terms of returns, Fiducian Group generated 30% in the past year, which is 18% over the capital markets sector.
Next Steps:
Fiducian Group’s future growth prospect aligns with that of the broader market and it is trading in-line with its peers. So if you like its growth prospects, you’ll be paying a fair value for the company. If the stock has been on your watchlist for a while, now may be the time to enter. However, before you make a decision on the stock, I suggest you look at Fiducian Group’s fundamentals in order to build a holistic investment thesis.
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Historical Track Record: What has FID’s performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Fiducian Group? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
