The All Ordinaries Index (ASX: XAO) has slipped more than 5% year to date, but there are still shares within the index that fundies recommend.
One such All Ords share is PSC Insurance Group (ASX: PSI), with one portfolio manager saying it’s a buy.
PSC shares are rising nearly 5% in today’s trade, outperforming the All Ords Index, which is currently up 0.2%
Let’s take a look at why this All Ords share is considered a buy.
What is it about this ASX All Ords share?
PSC Insurance operates multiple insurance services companies in Australia, the United Kingdom, and New Zealand.
QVG Capital portfolio manager Josh Clark recommends the PSC Insurance Group share price as a buy. Commenting on his reasons on Livewire, Clark said:
That one’s a buy. If you had a category of bottom drawer stocks, I’d pick that one for that.
You can sleep soundly at night with PSC Insurance, knowing that there’s a significant portion of insider ownership within the business that has a really prudent track record of capital allocation.
PSC achieved a record underlying earnings result in the 2022 financial year. Underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) surged 30% to $93.5 million.
In the 2022 financial year, PSC made multiple acquisitions including Alliance Insurance Brokers and Alan Wilson Insurance Brokers in Victoria.
So far in FY23, the ASX All Ords share has taken over Charter Union Insurance Brokers in Hong Kong. On 4 November, PSC also advised it has signed binding transaction documents to acquire Ensurance UK Ltd.
Commenting further on why he likes the PSC Insurance Group share price, Clark said the company has achieved “something like an 18% earnings per share (EPS) compound annual growth rate over the last five years”.
Clark highlighted the company’s mergers and acquisitions (M&A) strategy has underpinned the company’s earnings results, adding:
And then M&A is the real big one. That’s how they’ve really managed to juice that earnings growth, by prudently acquiring and integrating, paying the right price for similar businesses and folding them in. So I think that one’s a buy.
PSC Insurance share price snapshot
PSC Insurance Group shares have climbed around 10% in the past year and 8% year to date.
For perspective, the All Ordinaries Index has lost nearly 5% in the past year.
PSC Insurance has a market capitalisation of about $1.8 billion based on the current share price.
The post Buy this ASX All Ords share to ‘sleep soundly at night’: fundie appeared first on The Motley Fool Australia.
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Motley Fool contributor Monica O’Shea has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended PSC Insurance Group. The Motley Fool Australia has recommended PSC Insurance Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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