Keystone Law Share Discussion Threads

[halfpenny] 26/8/2020 12:45

KEYS, they are now looking good value and with economy moving does put them in a strong outsourcing position. Companies are now looking closely at their bottom line and in house legal teams are expensive so Outsourcing is the next phase to improve productivity. See £6 plus as we get closer to Results in September.

[boozey] 25/8/2020 17:32

Maddox, I agree. The business model of KEYS - like DWF (which I know about) and INCE (which I know very little about), has a business model that is tailor-made for tough times as companies outsource non core business activities (legal in this case) rather than carrying heavy specialist costs in-house. Seeking out sectors and companies that can prosper in the current climate is key to having a progressive portfolio right now. IT Outsourcing, online retail, Computer Games to name but a few. And Energy is a good defensive sector even if it will never set the world alight.

Specifically on Keystone, with a spread of 20p+ at times it is almost impossible to short it without taking a massive risk. As it is an illiquid stock one has to be prepared to stomach the swings up and down as long as over time it goes more up than down!

[maddox] 25/8/2020 12:41

halfpenny - you are a day trader with a short on, talking down the price - you haven't a clue. You've been shorting INCE and looking for another share in same space. Do you really think we're stupid and your one-liners will influence the sp?

Looking forward to your insights and analysis on KEYS.

[halfpenny] 25/8/2020 10:57

Target 600 and NOW is a time to get back in...

[halfpenny] 25/8/2020 10:56

KEYS are now LESS Risky i got out at THIS LOW and now expect further growth as profits increase and Risks decrease looks good and this is a LOW price

[wingrove4] 12/8/2020 15:35

Bought some more today, been a very profitable share for me as you say thinly traded, but noticed the spread is better than previously.

[tkamp] 12/8/2020 09:27

The fact that shares are flat despite this news is pretty surprising, though it just goes to show how incredibly little trading takes place in this stock. One thing from the news announcement that jumped out to me was the comment that 55-70% of lawyers's earnings in the UAE subsidiary will be paid out to lawyers. I believe that in the UK this share is 75%. That means that Keystone would see margin accretion long term in case the UAE operations are a success

[tkamp] 11/8/2020 18:54

Keystone just announced its opening a subsidiary in the UAE. Definitely positive for the growth story.

[halfpenny] 05/6/2020 11:15

KEYS looks like a silent winner with huge potential and looking very cheap. Lots of potential as economy Activity improves. My secret fund. How can you imagine a world without a solicitor? There will only be more work load as deals and conflicts will always continue.

[eca04bpm1] 10/5/2020 10:19

https://www.keystonelaw.com/news/keystone-law-appoints-eight-new-lawyers-to-the-firm8 new lawyers hired since COVID lockdown. KEYS strength and revenue driven buy ability to continue hiring.

[maddox] 02/5/2020 14:43

Thanks Tkamp, this is the attractive investment case that I'm buying into - it's not, as I see it, dependent upon Covid-19 or an increase in insolvency litigation. But, as I say, happy to hear a alternative argument.

[tkamp] 01/5/2020 15:42

Drivers are increasing # of partners joining Keystone (due to higher earning potential as they get a direct cut of their fees earned) as well as a higher average fee earned per partner (driven by general growth in law industry as well as perfect incentives from that direct cut, and lastly from partners at Keystone referring work to other Keystone partners). Keystone will continue to outgrow the industry for many years to come as they take more market share

[maddox] 01/5/2020 10:06

tkamp,

I agree, investorschampion opinions - this and others aren't persuading me to subscribe for their analysis.

Whilst these legal market firms should do well from the expected increase in litigation as a result of Covid, KEYS as a platform business model, has different drivers. KEYS is a service designed for remote working - perfect for the Covid Lockdown - but I'm not sure I see a direct revenue driver for KEYS?

Happy to be challenged on this?

[tkamp] 28/4/2020 16:11

"underlying growth drivers are the same as other law firms"

That statement is total nonsense. Keystone Law is aggressively taking market share in the industry, while the aggregate of 'other law firms' are obviously not. That is what allows Keystone to outperform the law industry across the cycle.

I used to own Keystone a few years ago and then sold out when the shares reached 500p (which was a forward PE of ~40x at the time). I recently bought back in at 420p and like the shares at this level. Keystone will probably manage to continue to grow revenues and earnings at 10-15% levels for 5-10 years to come (admittedly, 2020 may be an exception). With a capital-light business model, a strong (net-cash) balance sheet, and rock-bottom interest rates Keystone shares trading below 30x PE are actually pretty attractively valued.

[alphabeta4] 26/3/2020 08:49

Thanks for the 'heads up'. I have previously held Mano and was surprised to see it sold off with everything else. Unfortunately time has meant I haven't got that far yet but it is on my list.
BEG performance seems a bit odd too.

[mrnumpty] 26/3/2020 08:10

Alphabet . Your reasoning that the current misery should create more legal work is referred to in a recent You-tube video by the directors of Litigation Capital Management . LCM has just been tipped as a buy by Simon Thompson , the small-cap share tipster of Investors’ Chronicle . I bought back in to Keystone Law , Litigation Capital Management , and also Manolete Partners ( insolvency practitioners ) yesterday . Another legal company which I very much liked and held until the crash about three weeks ago is Anexo , who specialise in pursuing claims for vehicle accidents . However , given that there is currently far less traffic on the roads , it seems to me that , fortunately for the public but unfortunately for Anexo , there will be less business for them , so I don’t intend to go back in to Anexo for a while . Good luck and do your own research .

[alphabeta4] 25/3/2020 09:37

Just rebought - price off c40% in line with aim but looking at the work they do I would expect this period is going to generate a lot of disputes and need for legal advice (plus some insolvency work which sadly that they also cover).
Going through previous annual reports Brexit and an economic downturn are not mentioned in their 'risks and uncertainties' section giving me further confidence I'm getting a nice discount and now handy looking yield.

[mrnumpty] 27/9/2019 15:15

Tipped as a buy in today’s Investors’ Chronicle , but the price hasn’t moved .

[tkamp] 23/9/2019 10:00

The selling is not completely unjustified. The revenue growth rate has slowed down quite significantly compared to a year ago. There were also no signs of operating leverage over the period (which surprises me) since profit growth was not ahead of revenue growth, with Opex rising substantially YoY.

For a company trading on 35-40x EPS the combination of slowing sales growth and a lack of operating leverage coming through is an issue.

That said, Keystone is a quality company and I imagine the lack of operating leverage was more of an incident than a structural thing (in the past they did show evidence of operating leverage). Should have a long runway of growth ahead. Key is just that this growth is maintained at decent levels (>10% needed IMO) and operating leverage of perhaps 1.5x (translating into at least 15% profit growth)

[wingrove4] 23/9/2019 09:40

Why are people selling!

[gconvery] 23/9/2019 08:03

Nice results ...onwards and upwards

[gconvery] 10/9/2019 10:29

Moving back up to results day....nice £150k buy there