MartinInvest

Summary AFL is a ‘New Law’ firm growing in the realm of 50% p.a. looking to rival and disrupt the incumbent ‘Big Law’ firms. AFL is a stock is potentially overlooked; its financial performance is obscured by the nature of its historical data. It is trading at a P/E of 65x based on statutory earnings but it’s P/E based on normalized earnings are in the range of 16 – 20x. Management have demonstrated an ability to allocate capital via acquisitions. Business Summary AFL, also known as Australian Family Legal, is a firm that provides specific advice to clients in respect to divorce, separation, property, child custody and ancillary services such as litigation and estate planning. AFL has become the largest specialized family law firm and is seeking to become the most dominant player in the fragmented market of family law. Currently, there are neither national competitors nor leaders in this market. The company has an insurgent mission to disrupt the business models of traditi...

Nick Scali is an Australian business that imports and retails household furniture. Nick Scali’s product suite is catered towards those between the ages of 35 and 55, concentrated in the middle to upper income bracket. Primary economic factors that influence the companies in the furniture business include the real estate market, interest rates and GDP growth. Nick Scali's business model is underpinned by the network of its physical showrooms. Showrooms are  strategically beneficial as it gives customers a tangible experience with the available product suite. Showrooms invite customers to test the furniture, where they can quickly assign their level of personal comfort and gauge aspects of price to quality. Customers are also less inclined to return their purchased furniture after testing them. This is particularly important to those in Nick Scali’s target market: customers who are updating, upgrading or purchasing their furniture for their own optimal enjoyment. In terms of working ...