Compound Income
  • Blog
  • Scores
    • Subscribers Scores Access
  • Portfolio
    • Table of Returns
  • Resources
    • Check list
  • About
  • Contact



ICP - Should I stay or should I go now?

28/1/2015

0 Comments

 
We have had an update today from Intermediate Capital Group (ICP) which describes itself as a specialist asset manager providing subordinated structured lending, private debt, leveraged credit and minority equity, managing €14.9bn of assets in third party funds and proprietary capital. This is one I suggested in May 2014 as looking like an attractive, over sold trading idea. You can read updates and the original note here or via the Categories menu to the right of the blog.

So with the shares closing in on my suggested 500 pence target level and with the update today it seems like a good time to revisit the shares. In terms of the update the highlights from the statement were as follows:

  • Fundraising momentum continues with €3.1bn of third party money raised in the nine months to 31 December 2014. A full product pipeline is expected to result in very strong fundraising over the coming months
     
  • New third party money raised in the quarter to 31 December 2014 totalled €1.4bn, with €0.2bn of realisations in older funds
     
  • AUM increased by 8% in the quarter to 31 December 2014 to €14.9bn; third party fee earning AUM increased 12% to €10.8bn
     
  • Investment pace for direct investment funds maintained in competitive market and healthy pipeline of investment opportunities across products
     
  • Private equity secondaries business launched, as previously announced, with hire of specialist team and first investment
They say that they are benefiting from demand for alternative credit strategies "in an era of diminished returns for institutional investors". Therefore they see the current momentum in fund raising continuing. While on performance of their funds they say their mezzanine portfolio, including the weaker companies, remains stable and that their credit funds continue to perform either in line with, or ahead of their expectations.

Summary & Conclusion
ICP seems to be continuing to perform well in terms of its funds and their ability to attract new investors, although it seems that realisations will be lower in the second half. This is a mixed blessing insofar as it means fewer windfall gains but does make it easier for them to grow their book of business in total. This is a key focus for them as they seek to re-gear their balance sheet and increase their return on equity. Allied to this they continue to buy back shares as part of their planned £100 million share buy back programme. They have done £69 million and expect to complete the programme by the end of their financial year to 31st March 2015 so this should continue to support the share price.

Talking of which as you can see from the graph at the end, the shares have struggled since May but have done well since the low in the market in October 2014 when the Japanese central bank came out with their latest surprise QE move. This also suggests to me that they may also be seen as a potential beneficiary from the trickle down from the recently announced Euro QE. This is especially so as Europe makes up a fair chunk of their portfolio so it seems their business and investments could continue to prosper against that background.

So with the recent move in the share price having just about achieved my target price and left them looking over bought in the short term, although this recent move has also been supported by some earnings upgrades in recent months too. Technically 500 pence also seems like a potentially strong resistance level from previous peaks in 2013, although I note the all time highs were nearer 750 pence back in the boom days of 2007. They are however currently trading above their 20, 50 and 200 day moving averages which suggests they are in a bullish trend at the moment, but worth watching the 20 day for any signs of a downturn.

On the fundamentals, if we assume say around 34 pence of earnings for this year plus a forecast 22 pence dividend, this leaves them on nearly 15x and a decent 4.4% yield for the year to 31st March 2015. Looking ahead to next year with growth forecast these metrics could move to a fair looking 13.2x and 4.8%. On the CI Score it comes in around 71 reflecting value, growth and quality scores but the financial security is low reflecting their gearing and relatively low interest cover, but that's the nature of their business but worth bearing in mind given the difficulties they saw in 2008.

Thus on balance if you bought it for a trade I wouldn't put you off booking your 25 to 30% profits here and moving onto the next idea, especially if you are nervous about financial markets at this juncture. However as an investor if you are more relaxed about the outlook for markets and think they might progress from here then this one may be worth holding onto as it is a likely beneficiary of that trend and this could lead to a re-rating and break out of the share price, plus more dividends to come.

Still as I always say you pay your money and take your choice but hopefully you did choose to make some money on this one and I'll leave it up to you if should stay or you should go now or take the money and run - I do believe those are some cool tunes...

Picture
0 Comments



Leave a Reply.

    RSS Feed

    Archives

    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    August 2019
    June 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014
    March 2014
    February 2014
    January 2014

    Categories

    All
    32Red
    Aberdeen Am
    Admin
    A G Barr
    Airtel Africa
    Alliance Pharma
    Alternative Telecoms
    AMEC
    Amino Technologies
    Amlin
    Anglo Pacific
    Ashtead
    Asset Allocation
    Auto Trader Group
    Barclays
    BA Systems
    BATS
    Behavioural Finance
    Bellway
    Berendsen
    BHP Billiton
    Bloomsbury Publishing
    Bodycote
    Books
    Bovis Homes
    BREXIT
    Britvic
    Caledonia Mining
    Capital Ltd.
    Catlin-group
    Central Asia Metals
    Centrica
    Character Group
    Churchill China
    Cineworld
    City Of London Investment Group
    Clarkson
    CMC Markets
    Commercial Property
    Compound
    Computacenter
    Connect Group
    Croda
    Currencies
    Demographics
    Diageo
    Diploma
    Directors Dealings
    Dividends
    DotDigital
    Easyjet
    Economics
    Emerging Markets
    Emis
    Empiric Student Property
    Etfs
    Fairpoint
    Ferguson
    Ferrexpo
    Finsbury Foods
    Food Retailers
    Forterra
    Games Workshop
    Gateley
    Go Compare
    Goid
    Greene King
    GSK
    Hargreaves Services
    Hays
    Headlam
    Hedge Funds
    Hikma Pharmaceuticals
    Hill & Smith
    House Builders
    Howden
    HSBC
    IG Group
    IMI
    Imperial Tobacco
    Indivor
    Inflation
    Insurance
    Intermediate Capital
    Interserve
    Investec
    Investment Trusts
    It
    ITV
    James Halstead
    Jarvis Investment Management
    JLT
    Jupiter Fund Management
    KCOM
    Kingfisher
    Legal & General
    Lloyds Bank
    Luceco
    Macfarlane
    Maintel
    Man Group
    Market Timing Indicator
    Market Valuation
    Marston's
    Matchtec
    Media
    Merlin Entertainment
    Micro Focus
    Mining
    Mitie
    Miton Group
    Moenysupermarket
    Mondi
    Moneysupermaket.com
    Morgan Sindall
    Music
    National Grid
    N.Brown
    News
    Next
    Nichols
    Norcros
    Oil
    Page Group
    Paypoint
    Pennon
    Persimmon
    Personal Finance
    Pharmaceuticals
    Phoenix Group
    Photo Me
    Photo-Me
    Plus500
    Podcasts
    Polar Capital
    Politics
    Polymetal
    Portfolio
    Portmeirion
    Provident Financial
    PZC
    Qinetiq
    Ramsdens Holdings
    Rank Group
    Reckitt Benckiser
    Renewable Energy
    Renew Holdings
    Renishaw
    Research Papers
    Restaurant Group
    Retailers
    RIO
    RM Group
    Rolls Royce
    RPC
    RPS
    Safestore
    Sage
    Sainsburys
    Savills
    Schroders
    Scores
    SCS Group
    Sell Discipline
    Shareholder Yield
    Share Picks
    Short Interest
    Somero
    Spectris
    Sprue Aegis
    SSE
    Stock Spirits
    Strix Group
    S & U Plc
    Sureserve
    Sylvania Platinum
    TalkTalk
    Taptica
    Tax
    Technology
    Telecoms
    Tobacco
    Trading Ideas
    TSB
    TUI
    UK Market Update
    Ultra Electronics
    Unilever
    Utilitywise
    Value
    Victrex
    Vodafone
    VP.
    Water Utilities
    Watkins Jones
    WH Smiths
    William Hill
    Wynstay
    XL Media
    XP Power
    Yield
    Zytronic

    googleda4a17cac6d02bb9.html
    File Size: 0 kb
    File Type: html
    Download File

Powered by Create your own unique website with customizable templates.
  • Blog
  • Scores
    • Subscribers Scores Access
  • Portfolio
    • Table of Returns
  • Resources
    • Check list
  • About
  • Contact