When it comes to investing in other financials it is the ayes, or the 'I's that have it, in the form of IG, Icap and Intermediate Capital. The other financials sector contains a ragbag of different companies, which don't sit happily in one of the more mainstream boxes (banks, insurance or fund management).
You have a mixture of brokers, wealth managers, financial advisors, even exchanges. Some do a bit of everything.
IG's presence among them might come as a surprise. Many in this country see it as a gambling company given that its main product is spread betting.
Outside of the UK, however, IG's customers probably wouldn't know what a spread bet was. They know it as a broker that provides contracts for difference, a type of derivative which is actually very similar to a financial spread bet.
Its clients aren't so much traditional gamblers as they are financial traders. Playing the financial markets is arguably, at its heart, a form of gambling, but IG's profits are much more geared towards the way financial markets perform than they are to, for example, whether favourites are romping home or the top Premiership sides are getting beaten. As such it sits more happily with other financial firms.
The decision to concentrate on financials was taken many years back and has proved wise. IG has grown spectacularly, and has been steadily internationalising its business.
It has offices in several European countries as well as Australia, Singapore and Japan. Regulation prevents expansion into certain territories (such as China) but there are still places it can go, notably the United Arab Emirates and Switzerland.
In the meantime there is plenty of growth to go for, and it shows. Net revenues and profits before tax were up 28 per cent at the interim stage.
The relatively mature UK business accounted for just over £100m.
Europe, where IG's locations include France, Germany, the Netherlands and Sweden, brought in £37.8m combined. If, say, France and Germany produced half the UK's revenues, and the Netherlands and Sweden a quarter, just imagine how the numbers would look.
At just over 12 times earnings for the year ending 31 May, IG's shares are no bargains. In fact they are trading close to a five-year high. It is also true that sentiment towards the company is not hugely optimistic, although the volatility it thrives on could break out at any time.
IG does, however, offer a good prospective yield of 4.6 per cent. Some 60 per cent of earnings are paid out, which leaves the company enough room to grow the business without needing to borrow. This is one to hold for the long term.
There are certain parallels between what IG does and what Icap does. However, whereas the former concentrates on individuals, the latter concentrates on institutions, chiefly banks.
As such, Icap would appear to face more headwinds than IG. Financial institutions are busily de-risking, which would appear to be bad news for Icap.
But there are also developments in Icap's favour. Many derivatives banks used to trading between themselves are being forced on to exchanges by regulators. And Icap these days is as much an exchange as it is a broker.
Rumours of a profit warning last year proved groundless. In fact the company's cost control was better than many expected.
At 10.3 times forecast earnings for the year to 31 March 2012, and yield just over 5.3 per cent, Icap is still more expensive than its main rival Tullett Prebon (7.4 times, yielding 5 per cent). However, that is well deserved: you pay a premium to buy a Ferrari over, say, a Vauxhall Astra.
With a chief executive, Michael Spencer, who has a substantial proportion of his own wealth in a company he founded in a tiny office with a couple of screens, you have a man in charge who is actually worth his salt. His investors have been handsomely rewarded. Buy.
Finally there is Intermediate Capital, a company that provides "mezzanine finance" to other firms.
Mezz is a sort of halfway house between traditional lending or senior debt and equity. In theory it provides a better return than the former, while being not quite as risky as the latter.
We suggested a buy in our 10 to follow at 228.8p. With the shares smashing through the 280p barrier, it has been a stunning success. The rationale behind the tip was simple: with banks withdrawing from this sort of business so Intermediate should benefit.
The company has a strong balance sheet, and hasn't been hurt by a substantial one-off gain through a disposal in January. Despite this it still looks cheap at 7.8 times forecast earnings for the year to 31 March with a prospective yield of 6.4 per cent. Keep buying.
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