alphatrooper
13 Apr 2016
Re: Amateur stock note - update Just looking at today's share price.... and should probably refine my point a little bit. at 1.52 SP and forward earnings of 12p that is a multiple of around 13.2... or a bit over 8% premium to long term PE. Given I am using a +/- 10% range, it is actually trading inside fair value range.... as opposed to saying it is overvalued. tentatively poised is how I would describe it.... looking for flows&performance to move significantly in order to justify a re-rating.... IN EITHER DIRECTION!Peace outAT
alphatrooper
12 Apr 2016
Amateur stock note Hi all, In advance of Friday quarterly results, here is my attempt at some stock analysis for this one... Five key points: 1. investment performance mixed but negative at the group composite level 2. good returns on AHL funds, but very negative returns in GLG (particularly Japan)3. management fee margin already falling and AuM mix is now skewed to lower margins4. performance fees will be decent at AHL, but little help else where given poor performance5. cost base is higher and not just on variable components that may offset, but on fixed basis. My conclusion will be, excluding flows, a lower AuM across the piece, skewed to lower margins, some decent performance fees, but lower total revenue. Combined with a higher fixed cost base, lower net profit. Industry multiple gives £1.40 fair value but with a bull/bear spread (+/- 10% on multiple) range of 1.54/1.26. My argument as follows: 1. Performance. AHL: Diversified 4.2, Alpha 3.3, Evolution 6.7, Dimension 3.3 - weighted composite of 4.17GLG Alt: Eur L/S -2.7, Eur Alph -1.1, UK Alph -0.7, Convertible -2.9 - composite -2.38 GLG LO: Global -6.1, Japan -21.6, Strategic Bond 2.7, Undervalued -4.8 - composite -15.87FRM: -3.5Group composite using these funds as a fair representation of AuM = -4.7%.... so conclusion 1 is that investment performance at a net level will likely reduce AuM and the fees chargeable. 2. Noteworthy returns: AHL suite all positive which is good news for performance fees. But Japan fund down an eye watering 21%3. Margins Consult slide 7 of last presentation we see across all groups except GLG discretionary and Numeric that the margins are lower. At the group level this shakes out to a reduction from 114 bps to 91bps.... but of note is that 2 of the large AuM business AHL and GLG Alts have dropped from 194 to 145 and 124 to 99 respectively. That's 25% and 20% margin reduction. 4. Performance fees: AHL has positive performance and there perf fees applied, the others have negative performance but a large portion of AuM was well above HWM. conclusion here is for low per fees taken out of others and a proportion of the performance increase taken for AHL - approx. 137m. 5. Increased cost base: Total costs increased 13% last year. The above story suggest lower AuM and reduction in management and perf fees so the variable costs may come down. But there are some big ticket items on the fixed costs which need to be considered. Fixed compensation, cash costs and asset servicing all up 14%, 7%, 19% respectively. So cannot assume a full variable reduction. I am going with 600, being a little down from the 671 last year. Pulling it all together: Revenue: 916Mgt fees: AHL 248, GLG Alt 158, FRM 80, Numeric 63, GLG Disc 97, Gtee 59 - 704Perf fees: AHL 137, GLG Alt 30, FRM 5, Numeric 40 - 212Costs: 600 (pragmatic scaling down of variable costs using total cost of 671 as baseline) EBIT: 316Interest: 10Tax (EBIT- Interest @10%): 31Net profit: 275Average shares: 1700 EPS$c: 16cX-Rate (USD/GBP): 1.41EPS £GBp: 12p Long term PE: 12.2Fair Value: 1.40 Adjusting PE +/- 10% gives range 1.26 to 1.54Where I might be wrong: 1. Flows: if they have captured significant flows then AuM will be higher, regardless of the AuM mix, my above analysis assumes flat flows (because I don't really know how to estimate them). 2. Performance fees: crude calculation and assumption applying a rate to positive values and making manual adjustments to some business groups.... basically they could be a lot higher. 3. Numeric: they do not publish any Numeric funds performance so its performance impact on AuM is not captured here.... so good performance, more flows and performance fees could all be higher here. 4. Market multiple.... lots and lots of Macros issues going on right now, form China, to oil, to Brexit to bla bla bla,... point is a broad equity market multiple may override
Clarence Beaks
11 Apr 2016
Broker Recs - Mixed Views Strong Sell(1 of 8) Sell(0 of 8) Neutral(3 of 8) Buy(2 of 8) Strong Buy(2 of 8)
Clarence Beaks
11 Apr 2016
Re: Is AHL liking these markets? what have you asked her then despite her not being there long?
Warthog4
07 Apr 2016
Re: Is AHL liking these markets? Following a further communication to Man HQ I see they now have a new Head of Investor Relations, the third to hold the post in 18 months.Too much flak drove the others away perhaps?The latest, Andrea Waters seems switched on and a good and helpful communicator
Warthog4
05 Apr 2016
Re: What might get this moving? Heading towards the close,still falling and heading rapidly towards the 52 week low figure..A truly miserable one day performance in line with its general malaise.IMHO this share just has no future under its present ineffectual management who are taking money under false pretences. High time the AGM produced a vigorous shareholders' revolt
Warthog4
05 Apr 2016
Re: What might get this moving? I forgot to add-this has got the sp moving-downwards-rapidly!!I reiterate-I do feel Manny and His Manny Men have lost the plot-funds which were hatched in the last 2 years alone, for example, have fared badly-approx 40/71 are showing negative Total Returns
Warthog4
05 Apr 2016
Re: What might get this moving? Not really surprised- a quick glance at " Prices and Performance" on their webpage shows:-29/230 "prices and data unavailable"YTD results-130/230 showing negative returnsTotal Return-50/230 dittoAHL-3/30 YTD negative returns 7/30 Total negative returnsDoesn't make for inspiring reading does it?
Clarence Beaks
31 Mar 2016
Re: What might get this moving? Stuck around this price sadly. seems little to get excited about with EMG nowadays.
Warthog4
30 Mar 2016
Re: What might get this moving? Agreed.Management has resigned itself to running a mediocre company whilst being paid handsomely for doing sweet FA.Pathetic and I suspect will remain so.
Clarence Beaks
29 Mar 2016
Re: What might get this moving? Bit too stagnant for my liking.
Warthog4
18 Mar 2016
Re: What might get this moving? Don't blame you Clarence. I can't see this poxy share recovering ever-"Management" seem to be in a trance and have been for several years. Usual climb today followed by usual collapse.Pathetic.
Clarence Beaks
17 Mar 2016
Re: What might get this moving? Think I shall bail soon before I see heavy losses on yet another share.
Warthog4
17 Mar 2016
Re: What might get this moving? Yes,stuck like a car in ditch and will remain so until Manny and His Merry Men get off their backsides,stop sodding around making stupid doom and gloom comments every year, and get this pathetic company back on track.A tad acerbic??? Yep-just how I feel every time I see the SP stumbling around with all the finesse of a drunken lobotomist in a blackout.
Clarence Beaks
15 Mar 2016
What might get this moving? Seems to be forever stuck in the 150-160p range now.
