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ISA investors following the Ice style prioritise passive income over explosive growth potential. But in a world of uncertainty and volatility, investing in the boring businesses that have shown consistent financial performance and growing dividends can often yield impressive market-beating returns.
Don’t forget, in the long run, dividends have been responsible for over 70% of all stock market returns.
So, what makes this latest Share Advisor stock pick so exciting?
- Revenue has increased roughly 66% since 2021, demonstrating a clear and sustained momentum pattern.
- The shares are currently trading around 10x forward earnings – the cheapest valuation seen in years when accounting for net debt.
- Delivered a strong operational bounce-back from a one-time cyberattack that harmed short-term sentiment but not the long-term trajectory of the business.
As our leading Investment Analyst, James Fox, puts it:
“It’s a genuinely transformed business — with accelerating revenues, a recovering earnings profile, and a brand that has rediscovered its relevance — trading at a decade-low valuation, and that disconnect between quality and price is precisely where the opportunity lies.”
James Fox, Share Advisor
Of course, there is risk.
Conflict in the Gulf represents a very present risk to the business, and the disruption has already been felt across regional supply chains with knock-on effects in Europe. These costs either need to be passed on to consumers, who may already be feeling the squeeze from broader inflationary pressures.
That said, the company is arguably better placed than most to absorb these pressures, with a typically more affluent customer base and product diversification. And with an intelligently constructed and well-diversified passive income ISA portfolio, these risks can be managed, limiting the damage to a portfolio in case the situation doesn’t turn out as expected.
We don’t consider Ice investing to be gambling or a get-rich-quick scheme, though. We aim to be long-term owners of these businesses and reap the rewards from their success. Our investing time horizon for these shares is measured in years and decades, not weeks and months.
