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



Watching Man,  a real dog?

12/5/2014

0 Comments

 
Man Group - 3 year Relative.
This one came up on a three year under performers screen that I run and it attracted my attention as it had recently seen some earnings upgrades and some signs of life in the share price. Man Group PLC (EMG) operates in the alternative investment management sector (Hedge funds) and they have a geographically diverse investor base. The Company offers a comprehensive suite of funds through its performance-driven investment engines AHL, GLG and FRM to a highly diversified client base. 

On a cursory investigation I saw that the recent bounce in the share price had come on the back of the full year results. These showed some signs of stabilization in the funds under management (FUM) at $54 billion, down 5% but up 1% excluding guaranteed products. They also flagged cost savings of $270 million by the end of 2015 and share buy backs of $115 million. In addition to this they had surplus capital of $760 million at 31st December 2013 or $550 million after accounting for the final dividend and the proposed share buy backs. On the dividend they paid a 5.3c final to give a total of 7.9c which at 100 pence puts the shares on a yield of around 4.6%.

Since then they have had an IMS on 9th May 2014 in which AUM actually went up overall to $55 billion with net inflows of $2 billion offset by a negative investment movement of $0.7 billion in the first quarter. While it is a positive that the FUM has risen and that there were net inflows - that was the end of the good news. The other highlights were all fairly negative and best summed up by Manny Roman, Chief Executive Officer of Man, who said:
"The market environment in the first quarter has been particularly challenging and March was a very difficult month for the industry. In this context, performance across the firm was reasonable on a relative basis.

Whilst we are pleased to have recorded a solid quarter of net inflows, we remain cautious in our outlook for asset flows for the rest of the year given recent mixed absolute investment performance."
So good, but not quite Carling as the beer advert says and you know a fund manager is struggling for positive things to say when they say "reasonable on a relative basis." On valuation grounds this one is looking more interesting as it stands on around 13.7x this years forecast earnings (pre any changes from the IMS) and with a yield of 5% based on a forecast dividend of 8.6c - 1.5x covered. The Enterprise Value is around £1.2 billion after adjusting the market capitalisation for the cash and this represents about 4% of FUM - which seems quite high compared to normal asset management valuations in takeovers. However, as this one is primarily a hedge fund specialist with higher fees this might explain that. So more research required there - especially as their funds have been struggling and I believe there has been downward pressure on hedge fund fees generally and question marks about whether they are sustainable in the longer term.

Thus on balance it goes onto my watch list as the turnaround / recovery still seems to need more time to work through and I need to do more research on their management fees and business mix going forward as that drives their dividend policy. In addition, technically in the chart below I see a gap opened up on the chart earlier in the year at around 85 pence after the shares jumped around the time of the final results. Consequently, as these gaps often get closed eventually, I'll set up an alert and wait for this eventuality before considering a purchase of this one. This would also likely bring it back closer to the 200 day moving average and its book value. 75 to 80 pence has also been the low end of the range in recent years where it has found support in the process of maybe bottoming out. I guess they and other hedge funds could come back into favour and perform better as and when there is more volatility for them to exploit, perhaps when Central banks fully scale back their support operations and come the next down turn in markets perhaps?

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