The Financial Grimes: Cheapest quoted fund manager

by Jeremy Grime, an ii contributor |

This top City analyst reviews the financial sector stocks making headlines today.

When QE was brought in I imagine the government didn't expect it to have this effect. It's a bit of a tricky one to get out of that.  Last time was a credit crunch. Maybe it's a liquidity crunch in inflated assets this time. Now about these synthetic ETF's……………..

 

Ashmore  – Trading Statement  

Share Price 518p

Mkt Cap £3.49 billion

Conflict Disclosure: No Holding

Ashmore Group (LSE:ASHM) is an emerging markets investment manager.

  • Statement AUM up 7.6% over the quarter to $91.8 billion. Net inflows were 3.9% with market tailwinds of 3.7%. Net inflows across the board, except for equities that experienced a small net outflow.
  • Estimates.  Revenue in H1 was £152.1 million. FY to June 19 anticipates £311 million revenue which is a 4% increase on H1. They should beat that. For the year going forward, a 17% revenue increase is anticipated which compares to AUM 24% ahead of a year ago.
  • Valuation  PER 18.1X, Yield 3.5%. EV/AUM 3.9%
  • Conclusion The high valuation is perhaps correctly anticipating upgrades after a strong year. This one doesn't go in straight lines. Time to take some off the table.

 

Miton Group  – AUM Update  

Share price 47p

Mkt Cap £81 million

Conflict Disclosure: I Hold

Miton Group (LSE:MGR) is a fund manager.

  • Statement Net outflows of £87 million in Q2 is 1.9%, but market tailwinds increased AUM over the quarter to £4.7 billion. Half-year cash was £23 million.
  • Estimates Forecasts are predicated on a 6.5% increase in net revenue to Dec 19 which, with AUM 4% ahead of June last year, looks reasonable.
  • Valuation PER 10X Yield 4.9%. EV/AUM 1.3%
  • Conclusion Cheapest quoted fund manager. But there are some modest outflows. The only thing for certain is the price is wrong. Either the outflows accelerate or the price corrects. Personally, I would go for the latter.
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. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation, and 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.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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