Brooks Macdonald Share Price (BRK)

I read you varun25. I keen investor here, but given my age will not invest more as leaving Aim will cost me 20%, or my family will lose to HMRC. So sorry Brooks leaving Aim.

Https://x.com/baroninvestment/status/1884508689064919236

Not sure anyone is reading this but CEO, Chairman and CFO have bought some small positions in the open market. this is a positive and I have doubled down on this. the transition to financial planning seems to be going at pace and the valuation remains cheap. you also get 5% yield while you want for the strategy to play out.

The company has AUM are stable although bespoke being repalced with model portfolio services so there is downward pressure on yields. Even so, the overall AUM is stable. They have disposed off loss making international business and recent acquisition of Lift made sense to me although it does feel like they are paying a lot for that acquisition. The market cap is £250m. net cash is c. £70m (adding gilt portfolio and cash) compared to an EBITDA of £35m and FCF of about £20m. so EV/EBITDA is c. 5.5x and P/FCF is c. 8x. The numbers look way too cheap for a business of this nature which, although has headwinds with move from BPS to MPS, benefits from recurring revenues driven by AUM. there is a nice 5% divi yield at the current levels. what is the bear thesis at current pricing levels? I also own Tatton which is a much superior business (only focus on MPS and super lean) but trades at eye watering levels.

Gresham fund (which picks a lot of take over targets) has this as one of its largest holdings

Look at the multiples PE pay for these businesses. This is massively undervalued and needs to delist otherwise they are stuck doing M&A all in cash and can’t take over leverage therefore getting left behind vs PE peers