RE: New blog13 Dec 2016 12:47
New naked fund manager blog from reserch tree
"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?..."