Why has Slater & Gordon Share Price Skyrocketed?

Slater & Gordon [ASX:SGH] shares have surged 148% this past week. They are currently trading at $4.50 at time of writing, up from $1.81 on 27 February.

The legal company seems to be recovering from another rough year, although to get back to their peak — $785 per share in April 2015 — there’s still a long way to go.

Why the share price rise?

The current surge follows the half-year results released on 28 February. The announcement revealed that profit increased by 133% from the previous year.

The recent results represent the beginning of Slater & Gordon’s attempt to turn the company around with its transformation program.

Slater & Gordon stated that,

As a result of this program, Slater and Gordon now has a stronger capital structure, a simplified operating model and a clearly defined service offering; giving the stability required to now focus on growing its core services…

Underpinning this strategy is a business-wide transformation program to improve profitability while maintaining and enhancing the client experience and outcomes, focusing on removing unnecessary and unsustainable overheads and increasing revenue by investing in our core business.

What’s next for Slater & Gordon?

Despite the failed attempt to expand into the UK — which led to two class actions — the company seems dedicated to rebuilding its name.

The company has stated that they are ‘committed to implementing this program of business strengthening and modernisation so the firm can continue doing what it has done successfully for more than 80 years.’

Hopefully this is the beginning of the end of Slater & Gordon’s misfortune.


Dannielle Rawlings,

For Markets & Money

PS: There’s no use playing hot potato with stocks that could crash at any given time. In this financial climate knowing when to sell your stocks is crucial. Vern Gowdie from Markets & Money teaches you how to protect yourself from a potential crash in his free report ‘Five ‘Fatal’ Stocks You Must Sell Now’.

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