Business Report

You are required to evaluate as if you were security analysts making a recommendation on whether your client should invest in the equity of Slater & Gordon Limited (SGH) or specifically the equity traded on the Australian exchange (SGH.AX).
For this assignment your client has heard that Slater & Gordon has “used capital to buy market share in Britain”. Your client wants some key items in your recommendation including:
-explanation of the business strategy being pursued,
-your expectations for the earnings and EPS for fiscal year ends 2015, 2016 and 2017,
-the expected P/E ratio,
-your target price,
-the actual price on the ASX at September 21, 2015,
-whether you expect that SGH will outperform an alternate investment with an expected return of 5% per year,
-the recommendation: sell, underperform, hold, buy, strong buy