Pre-Paid Legal Services, Inc. Scores High on Validea's 'Hot List' Portfolio

ADA, Okla., Jan. 12 /PRNewswire-FirstCall/ -- Pre-Paid Legal Services, Inc. (NYSE: PPD) has earned a position as one of the top 20 U.S. companies on Validea's "Hot List" portfolio, a stock screening (selection) system that identifies the highest rated stocks from among 6,000 stocks tracked by Validea.com. Validea utilizes a proprietary software system which is based on the investment strategies of 12 leading U.S. investors, such as Peter Lynch, Warren Buffett and Joel Greenblatt.  

In a TheStreet.com article from Jan. 8, 2010, Validea's Founder John Reese highlights Pre-Paid Legal Services, Inc. (PPD) for its overall ranking as the smallest of small cap (capitalization) companies on the list and specifically for its "impressive" ranking among three of Validea's "Guru System" strategies, based on investment methodologies of Peter Lynch, Warren Buffett and Joel Greenblatt.

The Peter Lynch model utilizes a P/E/G ratio (price-to-earnings ratio relative to growth), which is a measure of how much investors are paying for growth. According this model, Reese said, "A P/E/G of 1.0 or less is acceptable, and 0.5 or below is really impressive." Reese said, "Pre-Paid Legal Services' P/E/G is an impressive 0.37."

The Warren Buffett based strategy utilized in the "Guru System" projects an annual increase in stock value over a 10 year period. According to this investment model, an annual increase of 15 percent is acceptable. Reese has written that under the Warren Buffett based strategy, "Pre-Paid Legal Services is expected to earn its investors a remarkable 26.7 percent."

PPD also garnered a high ranking in Validea's "Guru System" strategy based on the approach of investor Joel Greenblatt. The Greenblatt strategy utilizes a ranking comparison of thousands of stocks based on earnings yield, or the earnings per share divided by the stock price, and return on capital, or how profitably a company utilizes its assets. Reese noted that according to this strategy, PPD ranked second among the 6,000 stocks tracked by Validea.com.

In a Kirk Report interview from 2009, John Reese commented on the "Guru System" and the 12 investment strategies that form the basis of the Validea system. "While each strategy is very different, they are all investing methodologies that determine whether or not the stock of a company is a good value based on the underlying fundamentals of the company."

Commenting on the "Hot List" ranking, Pre-Paid Legal Services Founder and CEO Harland C. Stonecipher said, "The Validea.com report is encouraging both as an indication of Pre-Paid Legal Services' value as a corporate investment and because it highlights our value proposition with approaches taken by world-class investors."

PPD has recently been recognized as one of 20 undervalued small cap company stocks by Motley Fool analyst Anand Chokkavelu (October 31, 2009) and as the 4^th highest rated stock among the 3,500 highest rated U.S. stocks, based on an October 2009 ranking by investor Joel Greenblatt (cited in RealMoney). This past year, PPD was also ranked 66 on the Forbes Magazine listing of "America's 200 Best Small Companies."

About PPD -- We believe our products are one of a kind, life events legal service plans. Our plans provide for legal service benefits provided through a network of independent law firms across the U.S. and Canada, and include unlimited attorney consultation as well as will preparation, traffic violation defense, automobile-related criminal charges defense, letter writing, document preparation and review and a general trial defense benefit. We have an identity theft restoration product we think is also one of a kind because of the combination of outside vendors and our provider law firms. More information about us and our products can be found at our homepage at http://www.prepaidlegal.com.

Forward-Looking Statements -- Statements in this press release, other than purely historical information, regarding our future plans and objectives and expected operating results, dividends and share repurchases and statements of the assumptions underlying such statements, constitute forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. The forward-looking statements contained herein are based on certain assumptions that may not be correct. They are subject to risks and uncertainties incident to our business that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties are described in the reports and statements filed by us with the Securities and Exchange Commission, including (among others) those listed in our Form 10-K, Form 10-Q and Form 8-K, and include the risks that our membership persistency or renewal rates may decline, that we may not be able to continue to grow our memberships and earnings, that we are dependent on the continued active participation of our principal executive officer, that pending or future litigation may have a material adverse effect on us if resolved unfavorably to us, that we may have compromises of our information security, that consumer purchases of discretionary items may be impacted by a downturn in the economy, that we could be adversely affected by regulatory developments, that competition could adversely affect us, that we are substantially dependent on our marketing force, that our stock price may be affected by short sellers, that we have been unable to increase our employee group membership sales, that our active premium in force is not indicative of future revenue as a result of changes in active memberships from cancellations and additional membership sales and that we have repurchased more than half of our outstanding shares. Please refer to pages 18 through 20 of our 2008 Form 10-K/A and pages 7 and 8 of our September 30, 2009 Form 10-Q for a more complete description of these risks. We undertake no duty to update any of the forward looking statements in this release.

SOURCE Pre-Paid Legal Services, Inc.