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Shore predicts Arrow Global re-rating
There is ‘significant’ re-rating potential at credit management services provider Arrow Global (ARW), according to Shore Capital.
Analyst Gary Greenwood retained his ‘buy’ recommendation on the shares, which rose 4.3% to 156.6p yesterday.
He said over the medium term, profit would be driven by the ‘capital-light businesses which we think should help to drive a significant improvement in the quality of earnings’.
‘This transformation should drive earnings multiple expansion, in our view, with the current 2022 price/earnings multiple of 6x still far too low,’ said Greenwood.
‘We see fair value at 190p – 26% upside – but view this as being conservatively struck and with material upside potential
Interesting background to the fund. Clearly a lot of interest from institutional investors https://www.globenewswire.com/news-release/2020/11/13/2126238/0/en/Eaton-Partners-Acts-as-Exclusive-Placement-Agent-for-Arrow-Global.html
I was basing that on a 5 year spectrum. If you look at them with 10bn under management by 2025 with good returns . Well over double of that today. That's why I came up with that figure. Think before collapse 250 to 300p beginning of the year was fair value.
Based on the massively positive language used in the update I tend to agree with your positive outlook but £5 is seriously speculative. Given the likely macro economic environment across the whole of Europe the cash in has to be negatively impacted, balanced maybe, by more opportunities. 200 to 250.
Outstanding resukts, well played Arrow!
Good to see they are still bullish about future opportunities too. Won't be long before we're back ahead of the pre-covid price.
To me these look like a very good set of results at a most difficult time for the country as a whole. Nearly all the performance indicators are moving in the right direction and confidence in the future looks great. I didn't see a mention of a return of the dividend which although not huge would be a good signal. Hoping for a continued rise in the share price.
An excellent set of Q3 results. Expect this to go up from hear to 200p and over.
1) Return to profitability.
2) Funds under management will double to over 10 billion by 2025.
3) Excellent returns.
4) by 2025 leverage down from 4 to 3.
5) very attractive investment opportunities due to current situation
6) investor and fund management seminar at 2pm today
If we look at historical share price and these facts going forward if delivered believe SP will be 500p plus in future.
Q3 strong cash collections and a return to profitability - ambitious target of €10 billion funds under management target by end 2025 (currently 4.2).
Will have a spike today - Q3 discrete PAT up 15.8% to £9.1 million (Q3 2019: £7.9 million)
I think you are right. Looking forward to the results and investors/broker analysts call in the morning.
Gut feel is that the market has oversold these shares - Arrow are potentially well placed in the current environment as European banks will be under significant pressure to provision for non-performing loans as they should be able to benefit from their €1.2 billion of committed capital within their Arrow Credit Opportunities fund (which is predominantly undeployed) as well as from their combined subsidiary funds at Norfin and Sagitta where they have €2.6billion total funds under management). Going to be interesting to see where they end up after their results - could have a nice little spike (then again, may disappoint and continue their bumpy journey!!). Time will tell:))
Banks are involved with discussions with potential outsourcers are at an early stage, but banks are aiming to confirm the structure of the vehicle before the end of the year which could prove to be a windfall for Arrow. UK Finance is leading discussions to create a centralised “utility” that will deal with defaults on government-backed bounce back loans. It has contacted several potential outsourcers including London-listed Arrow Global to see if they would have enough capacity to support such a scheme, according to people involved in the discussions.https://www.google.com/amp/s/amp.ft.com/content/52f6ad43-abee-4a5b-929e-921dc4278122
Caused a slight dip, but it has picked back up OK since
19-Oct-20 09:49:02 137.00 206,903 Sell* 137.00 138.00 283.46k O
19-Oct-20 09:48:56 137.00 206,903 Sell* 137.00 138.00 283.46k O
19-Oct-20 09:42:26 137.00 150,000 Unknown* 135.80 138.20 205.50k O
19-Oct-20 09:41:37 137.00 145,939 Unknown* 135.80 138.20 199.94k O
SP has been a bit spikey over recent weeks, with relatively small groups of buys and sells.
I assume this is traders using 0% platforms to day trade and not LTH
(Please ignore previous version which had a zillion typos and got sent before it as ready) Well this dropping back to below opening price has to be the biggest shock on the UK markets today.
I can only imagine some people knew this is why coming, which is why the price rose to over 130p in the first place.
Strange goings on.
Still the COVID loans news re-emphasises that the business is indeed facing a "once-in-a-lifetime opportunity" to quote the last trading update (which wasn't even talking about COVID loans!) Only a matter of time before the market truly recognises the potential here and we're back over £2 and knocking at £3.
Well this dropping back to below opening price has to be the biggest shock on the UK markets today.
I can only imagine some pople lknew this is why coming, which si wehy the price rose to over 130p in the first place.
Strange goings on.
Still the COVID loans news re-emphasises that the business is facing a "once-in-a-lifetime opportunity" to quote the last trading update. Only a matter of time before the marlket truly recognises the potential here and we're back at £2+
Government in talks with Arrow (amongst others) over collection of £38 billion worth of Covid Bounce Back loans
https://www.thetimes.co.uk/edition/business/debt-firms-may-collect-covid-loans-plz2mnq82
Only one direction this is going in guys :)
And the rising confidence continues!
Kicking myself now as I top-sliced at 127p last week, thinking surely we'll see a short-term pullback before any further gains. No such pullback has materialised......maybe the market has finally cottoned on to the fact this is indeed an undervalued gem?
There are some very big ‘buys’ on the books this morning. Possible signs of continuing confidence in the management and their business model. Big long term potential at this price in what I believe is a very underrated and undervalued stock.
Successful raise. Great News! Should see a nice rice today!
Long way to go before it's back to fair value. be good to see 200p before the years out
Knew this would be back above 100p. Posting history confirms this!
nomlungu, you didn't bother to research ARW properly, sell out with a small profit and then post utter nonsense to try and scare others into selling........What a clown......jog on
If you'd researched the company it would be clear that ARW in are a perfect position to captialise on the pandemic/recession and that the SP should multiple bag by 200-400% in the near future
Covid has provided the perfect opportunity for ARW and with massive funds ready to deploy and invest the upside is going to be transformative. A lot of happy traders today and once’s they are clear we will be off to new post covid highs. Then eventually on to new all time highs as the strategy plays out
nomlungu the point the company makes is all this difficulty in enforcing debts means more business for them as they hoover up all the debts that other institutions are struggling to enforce
Its amazing quite how bullish they are on this point, do people here believe them when they say the current situation is going to create a once in a lifetime opportunity?