I looked at invocare when I used was into buying shares directly. I think they were sitting at around $7.50 at the time, and now they're a bit over $13.
It wasn't long after a relatives funeral. I was initially very skeptical about the value funeral directors provided, but when everyone else is emotional and inconsolable there is some value in having a discreet and steady hand directing proceedings.
Their results announcements always make inadvertently entertaining reading. From their 2016 half yearly results.
Martin Earp, InvoCare’s Chief Executive Officer, said:
“The business has performed well in challenging trading conditions. The focus for the second half of the year will be on continuing to manage our costs and putting in place revenue generating activities,whilst also continuing to fund initiatives for longer term value creation.”
During a period of lower than anticipated numbers of deaths in InvoCare’s core markets, comparable business funeral case volumes declined by 2.2% on the prior comparative first half of 2015.
Most public companies bemoan falling sales. For Invocare, less people dying puts pressure on margins!
Anyway, reason I didn't go with them is I felt they were by and large achieving growth by acquisition. They increase their revenue year on year by swallowing up competitors. And so it's unclear whether their profitability was derived from better management. Certainly there is potential for economies of scale, but its unclear whether any of this is being achieved. Think QBE - increasing revenue by buying other companies.
Also, the share seemed to be a bit of a darling amongst the Motley Fool and other newsletter tipsters. These stocks often seem to get a rise after they get tipped, with a subsequent longer term deflation.
Also, I'm not sure that the corporate model is the best for these kinds of services. Not quite sure why - seem a little too intimate and personal.
The other reason why I didn't by was I ended up going the way of the index.