Deja vu all over again

In the last 5 years I've bought shares in a grand total of two different companies: F.W.Thorpe and Plus 500.  And today that is still true.

Here's F. W. Thorpe

So there was more profit to be had there, and if I'd held on until now it would still have done well for me.  Ah well, can't win 'em all.

And here's Plus 500

Selling at £11.61 looked pretty dumb for a while.  But since then a lot has changed:

• They admitted that they experience wild swings in market P&L - suffering huge losses in some years and massive profits in others.  Previously they had stated that they had no net P&L in any given year.
• They had a dreadful first quarter in 2019 blamed on negative market P&L and subdued markets.

So why has a new "BUY" appeared in my chart above (I actually bought at £5.05 on 16th April)?  They have a high return on equity, they convert profit to cash extremely well (and then pay that cash out as dividends), and in the event that financial markets (and/or cryptocurrencies) experience volatility they should benefit.  

On the flipside, regulation remains a big risk.  Onerous regulation could mean they make less money per customer, while not affecting the marketing spend to acquire those customers.  And I suspect they are heavily dependent on attracting new customers, which is expensive - if the money they make from those customers no longer outweighs the marketing cost of acquiring them then their entire business model goes up in smoke.

At £11.61 those risks looked unattractive.  At £5.05 I think it's worth a punt.  It's now 5% of my portfolio.  There's a risk they go to zero, but I reckon a better chance that they go north of £10 again.