Intermediate Capital

Intermediate Capital

Intermediate Capital Group plc (ICP.L) is a private equity firm specializing in direct and fund of fund investments. Within direct it specializes in private debt, credit, and equity investments. It invests in middle market, mature, growth capital, reinvestment, industry consolidations, bridge financing, restructuring of a shareholder base, acquisitions, public to private transactions with or without private equity backing, leveraged and acquisition finance, leveraged credit, partnership equity, management buyouts and management buy ins, secondary investments, development capital, public quoted company finance, off-balance-sheet finance, refinancing and recapitalizations, and pre-IPO financing. The firm does not invest in property companies, early-stage funds, or start-ups. Within fund of fund, it specializes in secondary investments. The firm prefer to invest in all sectors with focus on insurance, healthcare, education, and childcare.

Intermediate Capital
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The chart of ICP.L shows price action in candlestick format over the past year. Although not shown VectorVest values the stock at 2541p while ICP.L closed at 2215p on the 28th of October 2021. The share is undervalued by the market according to the VectorVest valuation model.

In the bottom window below the price, the blue study shows that forecast Earnings per share (EPS) is rising and this is the engine that’s been driving the share price upwards. Over the past year forecast EPS has risen from approximately 90p to 124p.

On VectorVest, the Relative Safety (known as RS) of the earnings stream is ranked as very good. The share pays a dividend of 2.5% which is well covered by an earnings yield of double that figure. The dividend safety and dividend growth are rated as excellent on VectorVest.

The metric measuring long-term share price appreciation potential in relation to a AAA rated corporate bond (known as RV) is rated as excellent by VectorVest. ICP.L has a forecast Earnings Growth Rate (GRT) of 38% which VectorVest considers to be excellent.

Technically, ICP.L is trending strongly as measured by the proprietary VectorVest Comfort Index. The Comfort Index (CI) is an indicator which reflects a stocks ability to resist severe and or lengthy price declines. The Comfort Index is unique in investment research and a secret weapon. VectorVest rates the CI of ICP.L at 1.55 which is excellent on a scale measured between 0 and 2.

ICP.L has been in a consolidation phase since May 2021. The share has found support at the 2000p round number on three occasions. During this consolidation forecast EPS (the blue line on the chart above in the window below the price) has risen and this supports a breakout soon. Technically orientated analysts should easily observe a very positive pattern first noted by Richard Wyckoff around 100 years ago. The pattern known as a “Wyckoff Spring” adds significantly to the probability of a strong breakout soon.

ICP.L has recently moved to a BUY recommendation on VectorVest.

In summary, ICP.L has excellent fundamentals for strong growth in the share price and the technical position is very supportive of that view.

As I write on the 28th of October 2021, an examination of the technical position of the UK market shows that all the VectorVest Market Timing signals are positive and upward. However, although the short-term trend is Up, the latter has lost momentum during the trading session of the 27th of October 2021. VectorVest advises caution in buying shares until strong momentum in the short-term trend returns. The advice on VectorVest is shown below.

Neutral Color Guard - 27 Oct 2021
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Traders should consider buying into ICP.L because of the excellent mix of growth fundamentals coupled with a supportive technical picture, when the Color Guard on VectorVest indicates that it is safe to buy stocks. The fine blue line just below the price in the chart above plots the VectorVest stop loss for the share which is currently at 2062p.


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