"After a pretty eventful week, the subject of today's blog has to be the bombshell the FCA dropped on the CFD market. Full disclosure, I'm a holder of shares in both PLUS and IG.
If you look at the chart above, PLUS was already trading at a significant discount to its peers, due to last year's trouble with the FCA, trading at around 10-12x forecast earnings. CMC had decoupled from IG back in September after its profit warning and was on a PE of about 13x. IG was sailing serenely on 18-20x earnings.
Now they trade on 5.7x for PLUS, 6.9x for CMC and 9.8x for IGG. The obvious point is that broker earnings forecasts have probably not fully adjusted yet. If I take a 25% bite out of all three, then PE ratios go to 13x for IGG, 9x for CMCX, and 7.5x for PLUS. Are these multiples justified?..."
"Aviva has reported a good set of interim results with headline IFRS Operating profit at Â£1325m (+13%) which compared to our close to consensus forecast at Â£1330m. The interim dividend was 7.42p/share (+10%) in-line with expectations of 7.43p/share whilst the Solvency II capital surplus at 174% (180% at YE 2015) was also ahead of expectations at 171%. We view Aviva as a recovery play with potential for material returns of surplus capital to shareholders in the medium term. The valuation remains attractive with the shares trading on 2016/17F PE multiples of 7.8x and 7.2x respectively along with a current year dividend yield of 6.1%."
Sage was the most searched company across the Bloomberg platform yesterday. According to a Panmure note I read on Research Tree this morning it could be driven by perceptions of a positive read across to the solid Micro Focus results...
Here's the outlook statement from Stephen Kelly at the Interims: "Sage continues to perform and transform. We made a good start to FY16 with double digit recurring revenue growth as validation that customers are embracing closer subscription relationships. High quality organic revenue growth continued to accelerate H1 over H1. We remain confident in achieving our full year targets of at least 6% organic revenue growth and organic operating margin of 27%."
Still like this stock as it continues to expand cloud offering to fight back against xero et al...
Absolute beast of a report from Liberum this morning. 71 pages!! I got it from research tree. I really like the fundamentals of this business and now markets are getting hammered it's valuation is looking more and more attractive. Thinking about giving the brexit panic a few more days then testing the water