The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
I suspect that 'serious money' is now being targeted at PMI.
Stock or knickers to bounce back up ?
I do very much share your analogy of elastic, but having been an active buyer these last few weeks I do hope the elastic does ping back unlike the proverbial broken knicker elastic !
Perfect hand for those holdi.g at this level. Bounce back time beckons??
Just a hunch.....we are that close......
As each day passes and we get a dip the elastic is being wound tighter and tighter until one day either today, tomorrow or in the very near future, it will release and we will see double digit jumps. Just a matter of time.
As it's not in the big FTSE's there is no indication of any short selling but I am sure this is being driven down against all logic by a hedge manager. The good thing is that we are now at the position where a sharp reversal could/should occur as any short is rapidly closed against a precipitate rise. There have been no disclosures from major institutions excepting Fidelity in January so confidence in PMI is as strong as one would expect giving more than adequate upside potential for all at this level. Certainly any bid would have to be well north of £1.50. Like you say, Slater Investments have a good nose for intrinsic value and are comfortable weathering dips like this as they have already researched the upside which looks very strong at £2+ on all the Math I stated earlier. Solid.
Not wishing to be a PMI bore but this drip drip drop every day is becoming like Chinese water torture.
The only upside for me is that my limit at 89 was not filled last night so I only had to pay 88.3 today...
87p tomorrow I wonder?
There has to be a large seller here because buys are being filled just above the bid price.
But no TR 1 yet.
One thing that gives me confidence is the major shareholders list, always good to see Slater as a large holder on a small company, his record is better than most, by & large.
Very impressed by a lightening quick response to a website update that I highlighted. 10 out of 10 for listening to investors and implementing.
For right or for wrong I just added at 90.2 with a limit on to buy more at 89.
Agree on your observations but do think the market is pulling PMI down with little reference to its broad product base. Premiers Fixed income investments and US were up but UK and Europe followed market sentiment. It's diverse range of investments allied to decent provenance, history and prudent management means it should weather the current gloom better than most and be one of the prime beneficiaries as sentiment turns. Inflation is on.thr cusp of dropping as the anniversary of the Ukraine conflict starts to weaken 12 month comparators. I am quietly and confidently accumulating here on the back of a slow and sustained upswing....notwithstanding the ever present possibility of a bid which seems extremely justifiable on the Math.
Gents, thanks for your thoughts, I saw the woodbois myself but assmed the people taking losses on that would be holders of the fund/trust, not PMI shareholders?
A slight reputational risk, sure, but every investment collective has a few duds in it, even Smithson...
My main fear is that, even though I came to broadly the same valuation as Sisyphus, what does bother me is that betting against "Mr Market" is often a dangerous game as he is rarely wrong.
However the more I look the less negatives I can see so I guess I will add again and just hope Mr Market is having a bad day today.
PMI have made some bad judgment calls recently such as the Woodbois investment. What are PMI's losses on those?
I hope that in striving for higher profits, they have not become overly adventurous.
However most financials have been hit in similar way, all due to the high inflation/interest rate environment we are presently in. Next year will be quite a different story as inflation and rates reduce and a yield of 7 to 9% becomes attractive again.
Apologies, I missed out the logical math progression....try again.....
Calculating the logical share price for a listed UK asset manager with 158 million shares in issue and managing assets of £11 billion requires several assumptions, as the valuation of an asset management company depends on a variety of factors such as investment performance, fee structure, client retention, and market conditions. Therefore, any estimate should be taken as indicative and subject to significant uncertainty.
One approach to estimating the logical share price is to use a multiple of the company's assets under management (AUM) or its earnings. The most common multiples used in the asset management industry are price-to-earnings (P/E) and price-to-book (P/B) ratios.
Assuming the company has a P/E ratio of 15 and an AUM-to-revenue ratio of 1.5%, the calculation for the logical share price would be:
Calculate the total revenue generated by the AUM: AUM x AUM-to-revenue ratio = £11bn x 1.5% = £165m
Calculate the earnings based on the P/E ratio: Earnings = Total revenue / P/E ratio = £165m / 15 = £11m
Calculate the book value of the company based on the AUM: Book value = AUM x P/B ratio = £11bn x 1.5 = £165m
Calculate the logical share price based on the book value and earnings: Logical share price = (Book value + (Earnings x P/E ratio)) / Total number of shares = (£165m + (£11m x 15)) / 158m = £2.11
Therefore, based on these assumptions, the logical share price for a listed UK asset manager with 158 million shares in issue and managing assets of £11 billion would be approximately £2.11.
As I posted my calculations previously here we go again. Calculating the logical share price for a listed UK asset manager with 158 million shares in issue and managing assets of £11 billion requires several assumptions, as the valuation of an asset management company depends on a variety of factors such as investment performance, fee structure, client retention, and market conditions. Therefore, any estimate should be taken as indicative and subject to significant uncertainty.
One approach to estimating the logical share price is to use a multiple of the company's assets under management (AUM) or its earnings. The most common multiples used in the asset management industry are price-to-earnings (P/E) and price-to-book (P/B) ratios.
Assuming the company has a P/E ratio of 15 and an AUM-to-revenue ratio of 1.5%, the calculation for the logical share price would be £2.11
And I can't be the only one doing the Math hence this is now a highly vulnerable time for a bid arriving imo.
PMI's stock is being marked down out of all proportion to its credentials, prudence and competent management. Persistent negative news on inflation, which should now be peaking, has had a drag effect on the share as investors cover higher domestic costs. In contrast, its predictable growth, high dividend, and low valuation could all make it a solid consumer staples stock to hold during an economic downturn.
Early indications were for EPS of 7p+ a share but that could quickly increase as inflation begins to fall back due to the passing of the anniversary of Russia's war in Ukraine. As investor confidence returns, contrary to the current trend, Premier Miton should be a prime beneficiary.
Are there any profit forecasts for the current financial year. Interim's due 25th May. The only value with asset management is the profitability I would think, as there won't be any tangible assets (land, buildings etc).
10% Yield is very luring but over last three years the dividend seemed to be, close to all or more than EPS? Having said all that I am looking at this, but on the sidelines for now.
Sisyphus
Point taken but it is the only TR1 this month from what I can see and there has been reasonable turnover most days which makes me wonder if something is going on of which we are not yet aware.
Nevertheless the lower they go the closer they get to the bottom...
It's only RNS'd because Eastgate has crossed the 5% line by a marginal amount. When any insto or holder dips above or below certain %'s , in this case 5%, it triggers an auto RNS. These share adjustments are par for the course across the LSE listings. Nothing sinister or unusual.
In fact perusing the RNS it appears the seller is the Eastgate Court Trust, which is apparently the trust which controls the Premier Miton employee share benefit trust.
It could be that the employees know more than us or perhaps a large beneficiary is raising money for tax etc ?
Sisyphus any thoughts ?
13Martyn
Worryingly I just dribbled in a very few more at 92.3p....
What is going on, must be a big seller ?
Time to play 'Guess the Predator' at this level!
There's a lot of asset managers looking to consolidate premium quality teams and AuM out there......take your pick at this derisory sub £150m MCap.
Just topped up too at 93.83p in two deals.
Thought I was onto a winner initially buying at 99p, riding the rise above 130p+ and receiving the 6.3p dividend, but I agree Sisyphus, fund inflows will build going forward.
Half year results in May I think, so not too long for an update.
The US banking wobble certainly sent ripples to this side of the pond and added to investor uncertainties linked to the 10% inflation rate. This resulted in fund outflows across the board as investors chased higher returns hence the current depth plumbing here. Quality will prevail as it always does and as interest rates fall many will realise that self investment is not as easy as they thought. The rebalance will happen in the near future and inflows to PMI and other asset managers will rise accordingly. Premier Miton has an excellent track record as a prudent, trusted and competent team witha vast range of products not solely equities. Yes it is in the doldrums at present but the tide may turn very quickly indeed, and given the current MCap and limited shares when that happens the rise could indeed surprise. Any purchases at this level, given the quality here, should see a probable 100% gain in a 12-24 month time frame. A bid situation although speculative could most definitely be on the cards at this level.
A decent divi is also available here so well worth the patience.
I run the risk of being very wrong but I topped up again at under 94 today.
I can not see what is driving this down, other than more sellers than buyers of course...