Rubik Financial is well placed to benefit from tailwinds including the switch to the cloud and the increasing compliance burden on financial planners, but...

Rubik Financial is well placed to benefit from tailwinds including the switch to the cloud and the increasing compliance burden on financial planners, but there's no telling what this company will look like in five years. Roll-ups are risky, often ending up collapsing under a mountain of debt and intangible assets after overpaying for acquisitions - as was the case with ABC Learning. To make money from a roll-up you need to get in early and leave before the music stops. If Rubik achieves its lofty goals we can easily imagine making 15%+ annualised returns over the next few years and beyond. But to get involved in such a speculative situation we'd need a lower share price to increase our margin of safety or an improved performance to show the company's strategy is working. We'll follow the stock in case an opportunity presents itself, but for now it's AVOID. (VIEW LINK)