The Financial Grimes: Boring looks strangely attractive
This top City analyst reviews the financial sector stocks making headlines today.
6th August 2019 11:06
by Jeremy Grime from ii contributor
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This top City analyst reviews the financial sector stocks making headlines today.
Jeremy Grime spent 15 years as a financial sector analyst, working at Altium Capital, RBC Capital Markets, Panmure Gordon and most recently as Director of Research at finnCap. Jeremy is also a qualified accountant.
Jeremy's blog is written with more experienced investors in mind. However, we have included a brief glossary at the bottom of the page to help those less familiar with some of the language used. For more on key financial metrics and valuation ratios click here.
TP ICAP – H1 Results 
Share Price 282p
Mkt Cap £1.56 billion
Conflict Disclosure: No Holding
TP ICap (LSE:TCAP) operates in the world's financial, energy and commodities markets.
- Results Revenue up 1.3% to £922 million. Operating profit up 1.9% to £158 million. Margin ticks up from 17% to 17.1%. PBT down 3.6% to £134 million and EPS 19.2p. Global Broking was down 6% while the growth businesses of Institutional Services and Data & Analytics aren't yet big enough to move the needle. Net debt is modest at £80 million.  The statement confirms that another £75 million of integration savings will be achieved in H2 and the outlook says they are deep into the process of designing a strategy and so they are confident.
- Estimates H2 profit estimates are currently lower than H1 which suggests scope to increase FY estimates
- Valuation FY 19 PER 9.3X yield 6%
- Conclusion If there was an award for the most boring set of results TP ICAP would be a strong contender. And in current markets boring looks strangely attractive.
| Glossary | |
|---|---|
| PBT | profit before tax |
| EPS | earnings per share |
| DPS | dividend per share |
| ROE | return on equity |
| EBITDA | earnings before interest, tax, depreciation and amortisation |
| PER | price earnings, or PE ratio |
| Yield | dividend yield |
| FCF | free cash flow |
| NAV | net asset value |
| Price/Book (PB) | a company's share price versus what it owns |
| Book Value | a company's worth after subtracting debts and liabilities from assets |
| AUM | assets under management |
| FUM | funds under management |
| OTC | over-the-counter |
| FCA | Financial Conduct Authority |
| ESMA | European Securities and Markets Authority |
For information about Jeremy's 'deep dive' company analysis, you can email him at jeremy@charltonillingworth.co.uk
Jeremy Grime is an independent equity markets analyst and freelance contributor, not a direct employee of interactive investor.
These articles are provided for information purposes only. Â Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. Â The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
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