Jacob Finance and Investments Ltd provides non-banking credit services. The company was incorporated in 2009 and is based in Tel Aviv, Israel.

Israel

Jacob Finance and Investments Ltd

Financial Services

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

JCFN.TA reported revenue of ILS 0mn in the last 12 months, down 0% from FY23. The institution earned ILS 0 mn of interest before provisioning and taxes (IBPT) in the trailing 12 months (TTM), a decline of 0% from FY23 The dynamics of more stable income, as measure by recurring income before provisioning and taxes (RIBPT), were rather similar. EPS grew 24% from FY23 to ILS 2.88.

The stock has been growing steadily in the past six months, adding 50% in total. The stock has outperformed its global peers from the same sector and industry (as shown above), surpassing them by 42ppts in total. At the same time, the stock's performance relative to its the peers from the same country and sector is different. The stock outperformed these peers by 6ppts over the past six months and grew 9ppts slower in the past month. With respect to the stock's valuation against its peers, its overall price performance is 'fair'.

Jacob Finance and Investments Ltd reported a return on equity (RoE) of 18.7% in the last 12 months, up from 16.9% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to 3.1% in the last 12 months, an increase from 3.0% in FY23. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

JCFN.TA has below average trading liquidity. The average private investor can sell his common position in the stock almost immediately. Liquidity is very unstable and is somewhat unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. Another factor to consider is the substantial number of days with zero trading volumes, i.e., without any ability to sell a position. The stock has a small market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The solvency (credit quality) of JCFN.TA is very low. The credit profile rests on (a) a moderate capital position, (b) substantial asset quality, (с) a moderate corporate governance framework, (d) below average earnings power and cost efficiency, and (e) its very poor liquidity profile. We draw special attention to the fairly weak liquidity position, which could instantly become a critical factor in the case of an unexpected bank run.

In highly turbulent market conditions, JCFN.TA is as volatile as an index. In other words, the stock will move with the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be limited. 

In normal market circumstances, JCFN.TA is moderately volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will move slightly wider than the index. The stock's losses on its worst days (less than 1-5% of the time) will range from very low to negligible. 

Based on key historical and expected multiples, the stock is fairly valued relative to its peers. In particular, the stock is reasonably priced on P/E. 
	Editor's note: P/CR is Price to Core Revenue (CR), similar to P/S for corporates. CR = Net interest income + Net fee & commission income. P/IBPT is Price to Income Before Provisioning and Taxes (IBPT), similar to EV/EBITDA for corporates. IBPT = Core revenue -- Operating expenses + Non-recurring income. P/RIBPT is Price to Recurring Income Before Provisioning and Taxes (RIBPT), similar to P/FCF for corporates. RIBPT = Core revenue -- Operating expenses. 

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Jacob Finance and Investments Ltd

ILA 3475

3

Jacob Finance and Investments Ltd

ILA 3475

3

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

ILA 3475

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