I'm always on the lookout for new investment ideas and sometimes this can mean finding them through top investment managers' holdings.
Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) is an investment conglomerate that buys stakes in other businesses that it believes will be good long-term opportunities.
The investment team at Soul Patts have outperformed the Australian index over the long-term, so it's worth considering any new investments that it identifies.
Yesterday, Soul Patts announced to the market that it became a major shareholder of Empired Ltd (ASX: EPD) on 12 March 2018.
Empired says that it specialises in the design, development and integration of business knowledge, information technology and creativity.
One of Empired's biggest clients has been Aussie, the mortgage broker part-owned by Commonwealth Bank of Australia (ASX: CBA). Empired helped Aussie deliver accurate, intuitive and easy to use business information.
Empired's share price has fallen from $0.69 to $0.42 over the past few months, representing a fall of around 39%. However, it has risen since hitting a low of $0.39 earlier in the month.
In its half-year result for the six months to 31 December 2017 the company revealed that revenue grew by 2%, 'underlying' earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 14%, cash from operating activities grew by 489% and net debt reduced to $13.5 million. Net Profit after tax (NPAT) grew by 33%.
The result was at the upper end of management's guidance for the half-year. In the second half Empired expects 'solid' revenue growth and expects that EBITDA will be significantly higher in the last six months of the financial year.
Management said that Empired is well placed to deliver strong earnings growth in FY19.
Foolish takeaway
I can see why Empired is on Soul Patts' radar. It's operating in a growing industry and management is saying that the next 15 months will be good for the business. I'm hesitant to say it's a buy at today's price because I don't know much about the business, but it looks like an interesting opportunity.
