InvoCare (IVC) is the largest funeral operator in Australia, offering a wide array of funeral related services such as catering and transport packages. They own many household names, such as White Lady Funerals and Simplicity Funerals, that you have likely heard of.
The company’s share price has performed poorly since the start of the pandemic due to government restrictions on social gatherings that limited the number of people allowed to physically attend its funerals. We have all heard the saddening stories where friends and family weren’t allowed to attend the funerals of their loved ones. Even if you were lucky enough to attend an in-person funeral, you would know that the size of the event was restricted. InvoCare covers every aspect of the funeral, from the ceremony to the catering. As a result, the reduced capacity of people at its funerals have resulted in weaker financial performance, resulting in share price declines.
InvoCare’s stock is currently trading at $11.10, down 29% from its pre-COVID price of $15.80, as seen below.
InvoCare’s stock has risen sharply in the last few days. This is not a surprise given the removal of social restrictions in general. This is naturally going to lead to increased revenue for InvoCare, where the company’s share price may reach its pre-COVID price or better.
Another factor going in favour for InvoCare is that the average death rate across Australia has fallen since the pandemic began. This sounds counterintuitive given the current global healthcare crisis but its because people have spent much more time indoors. This has reduced the number of deaths that result from everyday activities, such as car accidents. Deaths related to these activities will increase as Australia continues to reopen domestically and internationally. InvoCare is great value at this price and worth an inclusion in your portfolio.
If you want to jump in on this deadly recommendation then give us a call.