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See the update - the original RNS was wrong. It was a Director purchase, not a sale.
Premier Miton Group Plc PMIP.L : Peel Hunt cuts target price to 100p
from 132p
I'm not sure that it is too cheap. Director sell (albeit small) is not boosting confidence.
Sisyphus; thank you for your excellent posts here.
I too am positive here, despite, like many sitting on a loss. I have numerous investment manager stocks, for 2 reasons. Firstly, I think they are beaten down/undervalued, and whilst the likes of trackers/low etc costs have and are excapating such, quality mgrs still have a place and I feel PMI is such; secondly, and partly because of the rise of ETFs etc, I feel the whole industry is rife for consolidation, for precisely the reasons you have expounded, efficiencies, reducing overhead)increasing margin etc. I do believe there are too many independent asset managers, with duplicated systems, premises, staff and costs which are ripe for pruning.
I particularly think this would be perfect for PHNX, as as well as a centralising overhead cost reduction, it would bolster the quality of offering/performance of PHNX's pre existing assets.
Pretty careless error by whoever writes these things. Luckily it did not (probably) have a material impact on the SP activity today. I retract my earlier comment now too, based on this correction.
So the DD sale was actually a buy, that’s more like it.
Abnormally high volume today, about 1% of the free float so far and it seems to be edging the SP up a little.
Where there's life there's hope...
Well, that CEO sale is not going to encourage me to buy more here. I know it is only a trifling amount, but all the more reason to find cash elsewhere, rather than a stock sale, if he needed additional funds, IMO.
Anyway, at least the RNS has not hit the SP today. Fingers crossed I do not get to make a decision as to whether to add more here at the price I had in mind. Less inclined to do so now. IMO, CEO should have bought at least 5% of his salary in the window of opportunity to do so. Hey ho.
The PMI interim gave a fair view of current investor sentiment and the BoD has never fallen into the fatal trap of overpromising and underdeivering. It's a seasoned crew with an excellent track record for prudence and good risk spread. It has huge capacity to cope with increased volumes as investor sentiment turns.....that is one of the reasons that makes the stock very vulnerable to M&A activity at this very low MCap. Either gaining traction as an independent or swallowed at a substantial premium, it's a good share for a patient investor wanting a divi with both recovery and takeover speculation in the mix. Solid but oversold.
I bought a few of these a few months ago. Heard positive things about them, on top of a good dividend and a fairly battered SP too. More battered now of course! The thinking being this could be a stock to buy and forget about, as mostly I buy/invest/trade individual stocks, so some additional balance to the p/f.
Still a holder and will probably stick with the original plan, but not buying more yet because IMO this is going lower.
Also, considering their investments in WBI (until recently) and ENET (the latter I have the misfortune of having lost money on)...I am really hoping they do not have too many more dogs in the p/f! I can buy hounds all by myself :) I guess if ENET does come good and PMI ends up making a profit in that one, it will offer some comfort. Really not convinced personally, but time will tell.
I did not think the PMI update was that good. Inside buying would be welcome while we wait for some recovery. On the fence really, but willing to give them some more time because until recently, lots to like I think. Only as good as your next quarter/year etc though, of course.
Would take a quid a share right now. Would bite your hand off for 120p, but would happily take 150p or more if I can get that :)
The absurdity of the current price is totally at odds with the facts. One approach could be to consider the fund manager's AuM as a significant value driver. Assuming a base case industry average valuation multiple of around 1% of AuM, the £11 billion AuM would equate to £110 million in value. Adding the cash holdings of £31 million, we have a total estimated value of £141 million (£110 million + £31 million). However, it's important to note that this is a base case estimate and doesn't account for other financial and qualitative factors like the prudence, providence and quality of PMI. When you factor in those parameters even a moderate fund manager with PMI record would be worth 2% AuM giving £220m plus £31m cash. That equates to £251m MCap - that's roughly twice its current level and not fully reflecting the underlying quality.
This is my rationale and why i see the company as a very palatable target for a bigger player. Take the package, add in the economies of scale and cut out duplication and anything around £1.50 a share is a steal. Mega vulnerable at this time but equally able to thrive given change in investor confidence as market moves forward. Personally I see PMI losing its independence in the very near future as the target of a £1.30 rising to £1.60?? unsolicited bid from Phoenix Aviva L&G etc.
Sisyphus
Did you see Lansdowne partners have just acquired Crux management ?
PMI must surely be in the mix and as you have correctly pointed out there is no allowance for this possibility in the share price, (yet!).
Scarfell
2 differing views, that is what makes a market.
I don't personally see much AUM withdrawn, most of the reduction is the fall in value of assets this period.
What I see, hopefully not through rose tinted spectacles, is a well thought of fund manager, most of whose senior people seemingly with a lot of skin in the game, good performance against their indeces in a cyclical market which it is quite feasible to think could be turning up soon and small enough in size to be gobbled up by a bigger player, & that is thrown in for nothing.
AUM well down and number of employees up - not a good look. Profit about the same as the CEO's remuneration - no wonder shares are down 8%. I'm not remotely tempted to top up and logic tells me to bail out.
Position taking as at this level a 30-50% bid would still give huge scope for centralisation and streamlining costs.
Sisyphus
Despite being long & wrong as I am, I have to agree with your optimism on this stock & I have added a bit more this morning to my holding.
One of the big boys will now start to hoover up shares as all the news is out and the cash and lucrative AuM make for an easy steal with the ability to streamline and merge overheads. A peach at this level.....LGen, Av. and Phoenix must be watching.....
With £31m cash, an MCap of £131 and AuM of £11 billion this is woefully undervalued and a superb target for a bigger player now. Watch this space IMO, as current drop should reverse as logic prevails.
Not a great report in my view. Halved profits. A cut in divi which remains at the top end of their dividend policy and from the tone of the report may be uncovered in future. Scope for further div cut going forward.
Some good points, the start of this year is better.
However, time to retrench, reduce overheads, hope for better economic climate next year.
Pretty much as expected...treading water with the capacity, resources and prudence to manage the status quo but quickly ready to respond to market change. Cash is £31m and over a quarter of current MCap. With AuM of £11bn, Premier is still well under sensible value level given the geared upside and probable predator interest by bigger fund managers. All in all a steady hand in choppy waters but Mr Market will soon be looking at gearing, adaptability and competence as market confidence returns. Horizon scanning pays bigger dividends for those who patiently wait rather than speculate on smoke and mirrors.
A cut in divi but a reasonably upbeat report from the board.
Question is, were the market expecting worse than this or better ?
We will know soon...
All the pessimism is already in the price at this level... Any 'significant' fall in AuM would have been RNS'd. Most asset managers are seeing an increase in cash outflows and PMI will I assume follow suit. The big swing will come when Mr Market realises that PMI will be one of the prime beneficiaries as confidence starts to return and Mr Market certainly looks to the future first. Things will start to swing north and hopefully the H1 outlook will provide guidance. PMI board are not given to overpromising and underdelivering. The current low MCap was indeed triggered by the Q1 cautious outlook. H1 horizon scanning should help reassure. Solid and seasoned team.
Sisyphus
I certainly hope that there are no unpleasant surprises on 31st in the rns, but the SP really has been inordinately weak.
Mr Market is not normally wrong but I do hope he is this time...
Well if no one is looking they really should be.
H1 results are actually scheduled for 31st May according to PMI.
Could someone be looking seriously at PMI in the crosshairs? Just a theory.