MIDAS SHARE TIPS UPDATE: Our whistleblowing tip Law Debenture is sprinting ahead
Law Debenture is an unusual beast, combining an investment trust with a professional services business that provides advice to pension schemes, helps whistleblowers and administers bonds for companies.
The blend sounds complex but it works, creating a group that offers robust growth and reliable dividend income.
Midas recommended the shares in March last year at £5.76, since when they have risen nearly 7 per cent to £6.14 and paid out 19.5p in dividends.
Law Debenture’s whistleblowing division, Safecall, is expanding fast
The shares hit £6.50 earlier last week but fell back on general market weakness. This was unjustified.
Chief executive Denis Jackson is driving the business forward and is optimistic about the future. His optimism is well placed.
Pension schemes are under increasing pressure to become more professional, Law Debenture provides professional trustees to over 200 company schemes and demand is growing.
The whistleblowing division, Safecall, is expanding fast as well. Employees can call the firm in confidence if they feel that something is not right where they work and it has 500 customers worldwide, including Save the Children, Virgin Money and the Odeon film group.
Politicians are interested in this area and an Office of the Whistleblower may soon be created to protect those who speak out against their employer.
On the investment side, Law Debenture focuses on UK companies, such as GlaxoSmithKline, Prudential and Rio Tinto.
UK shares are deemed hugely undervalued compared to their overseas peers but investors are becoming more optimistic about the London market and Law Debenture should benefit.
The company has maintained or increased dividends for the past 40 years, generating income from the professional service businesses and the shares in which it invests. This is set to continue in 2020 and beyond. Results at the end of February should show good momentum across the group.
Midas verdict: Law Debenture shares are moving in the right direction but the best is yet to come. Existing and new investors should find long-term value in this stock.