How to Invest in Prepaid Legal Stocks
Pre-Paid Legal Services, Inc., sells monthly membership packages for legal consultations to consumers and businesses. These plans help consumers offset costs for legal services and consultations that range from IRS audits to identity theft. It was initially founded in 1972 as the Sportsman's Motor Club. In 1978, the stock for Prepaid Legal was listed over the counter. After selling on the NASDAQ and the AMEX during the 80s, Pre-Paid Legal Services moved to the New York Stock Exchange in 1999.
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Instructions
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During the period between its founding and its move to the NYSE, Pre-Paid Legal made several large staffing cuts in an effort to become profitable. By 1999, the staffing level was more than double than before the last layoffs.
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Annual membership sales have increased consistently since early 2000. Harland Stonecipher, CEO and chairman of the board, has been with the company since 1972. Many key management staff members have a 10- to 20-year history with the company.
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The most recent product introduced for members is the Living Will. The company anticipates that products like this will result in more memberships and increased revenues. The graying baby boomer population, among others, needs convenient, cost-effective way to make preparations for asset disposal and advanced directives for health care.
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Some notable competitors that offer the same or similar plans are Met Life's Hyatt Legal Services and GE's Legal Services Plan of America. Get some insight into factors that are affecting all stock in the industry. Assess competitors' potential to affect Prepaid Legal Service's market share in the industry.
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Use the company's stock ticker symbol to look up the standard stock table on the NYSE. The NYSE ticker symbol for this stock is PPD. It is also listed on 10 other popular stock exchanges. Some other stock exchanges add a letter to this symbol that denotes the exchange's name.
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Look at a snapshot of the company's 52-week high and low for the shares. Review the stock's current earnings and price earnings ratio for the past five years. Although the P/E exceeds that for the industry sector, it lags behind that for the Standard & Poor 500. Pre-Paid Legal has not paid stockholder dividends the past five years.
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Choose a full-service or discount broker that conducts trades on the NYSE or any of the other 10 exchanges that sell these stocks. Get a prospectus from your broker and review all of the data. Buy shares when the price reaches your target price.
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Tips & Warnings
Many finance sites provide additional comprehensive than individual stock exchange reports. Most sites will allow you to look up the company by name or with the stock ticker symbol.
