Insurance repairer Johns Lyng Group Ltd (ASX: JLG) has been one of those companies that has been well liked by professional investors in recent times.
Increased weather disturbances triggered from climate change, analysts inferred, would be a massive structural tailwind for the 70-year-old S&P/ASX 200 Index (ASX: XJO) business.
However, the last year has been a real disappointment for investors.
The Johns Lyng share price is now trading almost 27% lower than it did 12 months ago. It's an unflattering comparison to the ASX 200's 3.36% rise.
QVG Capital analysts, though, reckon a turnaround isn't too far away.
Prudent July moves
The QVG team is especially bullish on Johns Lyng's corporate moves last month.
"Johns Lyng announced two acquisitions and a $70 million capital raise," it stated in a memo to clients.
"SmokeAlarms Australia and Linkfire… provide fire protection and inspection services. They will form the basis of a new division for Johns Lyng Group called 'Essential Home Services'."
The expansion is something of a "back to the future" move for the company.
"This marks a re-entry into this division as Johns Lyng had previously had a joint venture with RACV in the home services market."
Home services is an attractive area to play in as it often provides "annuity revenue" and "higher than group margins" for Johns Lyng.
The division also has potential to receive substantial referrals from the company's strata arm.
"We believe the new division makes sense," read the memo.
"Johns Lyng Group has had a good track record of integrating acquisitions and tend[s] to be very thoughtful at how they go about retaining and incentivising key people in their acquired businesses."
Johns Lyng is due to report its annual results on Tuesday 29 August.
Good value right now
The Motley Fool's Tristan Harrison also recently expressed his favouritism for Johns Lyng, saying the shares are going for a nice discount at the moment.
"Why is it good value? The underlying earnings continue to grow… Normalised earnings before interest, taxes, depreciation, and amortisation (EBITDA) excluding commercial construction is expected to grow by 56% year over year to $133.2 million."
He feels like core earnings can keep growing in line with an ever-increasing frequency of weather events.
"I'm also very positive about the company's expansion into areas like essential home services, as well as acquiring body corporate managers because of the synergies."
A whopping eight out of 10 analysts currently surveyed on CMC Markets consider Johns Lyng shares a buy.
