LONDON -- The shares of Quindell Portfolio (LSE:QPP) advanced 0.9 pence, or 15%, to 6.9 pence during early London trade this morning after the company once again responded to press speculation about the health of its accounts.
Quindell, which manages claims on behalf of insurers, said it enjoyed "a strong balance sheet, good debtor controls and continues to trade profitably with significant traction in the insurance industry."
The AIM-quoted firm referred to "active shorters" calling into question an equity swap and said it knew of "no valid reason" for the group's recent share-price decline.
Since the start of the month, Quindell's shares have slumped from almost 14 pence to as low as 6 pence.
This morning, Quindell revealed the equity swap in question represented 13.3 million pounds of the wider group's 202.3 million pound debtor position as at the end of 2012.
The company also stated that all the shares relating to the equity swap had been issued and included in the earnings per share calculation for last year's results.
Those results, issued last week, showed sales surging from 14 million pounds to 138 million pounds and adjusted profits soaring from 6 million pounds to 49 million pounds.
The figures also showed underlying earnings climbing 92% to 1.4 pence per share, which supports a P/E rating of less than 5 at the current share price.
Of course, whether that lowly multiple, today's rebuttal to the "active shorters" as well as the wider prospects of the insurance sector all combine to make Quindell a buy is something only you can decide.
For what it is worth, Quindell's directors have pledged to buy the shares as soon as stock market rules allow them to do so.
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Maynard Paton has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.