Quindell continues share price recovery as Toscafund buys in

Quindell announced today that the privately owned asset manager, Toscafund, the company founded by Martin Hughes in 2000 and specialising in absolute return products, had bought 24.3 million shares representing 5.3% of the company. After the halving in Fidelity’s stake in the company in November, perhaps a sign that institutional demand for the shares has returned. Tosca’s investment also seems to demonstrate that there is appetite for the turnaround story after all the rumours and online reports of an impending cash crunch before Christmas proved to be false.

After a collapse in the share price in late November as Quindell’s founder Rob Terry sold down his 8% stake down below the 3% notifiable threshold, the shares have recovered to trade at around 60p today helped by news on the 31st December that the company was in exclusive discussions with an unnamed third party about the sale of one of its division’s and that the board was “comfortable” with the cash position of the group even if the disposal did not happen.

David Currie, the interim Chairman, has brought in PwC to review the company’s accounting policies and the results of this and the 2014 are awaited with great interest.

The Daily Mail was reporting this morning that “After crashing 86 per cent in 2014 amid controversial circumstances, Quindell’s shares were either ripe for recovery or heading for the knacker’s yard. They yesterday succumbed to early profit-taking and touched 47.75p before rallying to finish 0.5p dearer at 54p. Rumours are rife that Quindell will soon announce the appointment of a ‘heavyweight’ chairman to take over from David Currie who stepped up as interim chairman in November following founder and chairman Rob Terry’s welcome resignation. Currie immediately approved PwC to review the company’s accounting policies and cash generation. On that score, dealers hear PwC will soon give Quindell a clean bill of health, clearing the way for its break-up or sale.” http://www.thisismoney.co.uk/money/markets/article-2899704/MARKET-REPORT-Scandal-hit-insurance-claims-processor-Quindell-shows-teeth-shares-soar.html

For those buying in at the lows last year they have made a 100% return already, but the momentum seems to be there for further gains if as the Daily Mail report the PwC report doesn’t uncover any major problems and the earnings reported to date in 2014 turn out to be more or less kosher. Could Quindell be the big recovery play of 2015 after all the negative news and press of 2014 with Rob Terry out of the way? You need nerves of steel that’s for sure but for me this looks a very interesting contrarian play.

Contrarian Investor UK

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