The Motley Fool

Could the InvoCare share price turn around?

The InvoCare Limited (ASX: IVC) share price is in the red on Thursday, down 1.52% to $11.05 in lunchtime trade.

Although down 30% in the last year, the InvoCare share price soared 11% higher over the past 2 weeks, from a 52 week low of $10.10 on Jan 3, 2019, to close at $11.22 on Wednesday.

Could the InvoCare share price turn around?

2018 wasn’t as smooth sailing for Australia’s largest funeral operator as it may have foreseen

At the UBS Investor Conference, held in November 2018, Martin Earp – CEO of InvoCare, restated the October trading update that the number of deaths over the winter period was down approximately 6%, further adding that every 1% decline in deaths equates to a $3 million loss in revenue for the funeral business. Any further weakness in the funeral case volume for H2 is expected to impact the bottom line.

Despite the negative exposure, InvoCare’s ’Protect and Grow’ plan, designed to respond to changing customer needs, saw the company continue to grow its market share.

Between March 2018 and September 2018, InvoCare acquired eight funeral parlours in Australia and three in New Zealand. The acquisitions account for another 2,080 and 1,730 funeral cases in respective countries.

Presently, InvoCare has an estimated market share of 5% in regional/rural areas and 32% in metropolitan areas.

Amid growing competition in the funeral industry, InvoCare’s management undertook research to understand the needs of their customers, highlighting the key issue that it’s not necessarily the price of the funeral but rather the experience and level of service offered that will determine which provider they choose.

Hence, refurbishing work is currently on-going to inject a modern look, feel and experience into InvoCare’s 221 funeral locations. Work is expected to be fully completed by end 2020.

Foolish Takeaway

Life is unpredictable, but when tragedy happens, InvoCare has a chance to benefit. While many investors may avoid this taboo stock, it is one I would like to own because it’s an undying business.

Based on the current price, InvoCare’s price to earnings is 15.49 times as compared to the industry at 19.19.

Reflecting on a quote by Warren Buffet’s Berkshire Hathaway partner, Charlie Munger,

“A great business at a fair price is superior to a fair business at a great price.”

I believe this is an opportunity to add another great business to my retirement portfolio.

Two other ASX shares that I am looking for my retirement portfolio are National Australia Bank Ltd (ASX: NAB) and Brickworks Ltd (ASX: BKW).

NEW! Top 3 Dividend Bets for 2019

With interest rates likely to stay at rock bottom for months (or YEARS) to come, income-minded investors have nowhere to turn... except dividend shares. That’s why The Motley Fool’s top analysts have just prepared a brand-new report, laying out their top 3 dividend bets for 2019.

Hint: These are 3 shares you’ve probably never come across before.

They’re not the banks. Not Woolies or Wesfarmers or any of the “usual suspects.”

We think these 3 shares offer solid growth prospects over the next 12 months. The first two currently offer fat, fully franked yields. The last is a surprising REIT offering you the benefits of being a landlord with none of the hassle! You’ll discover all three names and codes in "The Motley Fool’s Top 3 Dividend Shares for 2019."

Even better, your copy is free when you click the link below. Fair warning: This report is brand new and may not be available forever. Click the link below to be among the first investors to get access to this timely, important new research!

The names of these top 3 dividend bets are all included. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies move – we may be forced to remove this report.

Click here to claim your free copy right now!

Motley Fool contributor Ivan Loh has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of National Australia Bank Limited. The Motley Fool Australia has recommended Brickworks and InvoCare Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

5 ASX Stocks for Building Wealth After 50

I just read that Warren Buffett, the world’s best investor, made over 99% of his massive fortune after his 50th birthday.

It just goes to show you… it’s never too late to start securing your financial future.

And Motley Fool Chief Investment Advisor Scott Phillips just released a brand-new report that reveals five of our favourite ASX stocks for building wealth after 50.

– Each company boasts strong growth prospects over the next 3 to 5 years…

– Most importantly each pays a generous dividend, fully franked.

Simply click here to find out how you can claim your FREE copy of “5 ASX Stocks for Building Wealth After 50.”

See the stocks now