Hargreaves Lansdown Share Discussion Threads

[mikeran] 12/11/2014 16:12

well wise people to take some cash before the Market players do and not a moment too soon . What was the share price back end of the summer . The last big drop from around 1250 was on the back of a US hedge company and its agenda of " We believe" it is too high. And now the players have taken another 6% in two days. All that on top of the evidence- increased profit, Dividend and another agenda - BUY .
yes they follow with their Computers like sheep- one red all red. The market has been told for a while that interest rates are not going to rise any time soon. They continue to read their message rather than BOE governor.

[robinnicolson] 12/11/2014 15:53

I would suggest HL. is down today because the market believes UK interest rates are not going to rise anytime soon, which affects the income Hargreaves Lansdown receives from clients' money.

[allch2] 12/11/2014 15:16

Nice speech, but since may the ceo, fd, 2 ned's and now the wife with the most expensive taste in handbags and shoes in the world have all sold stock, ftse is flat. and this is down 3 per cent so maybe we should be looking at the micro rather than the macro

[mikeran] 12/11/2014 13:01

Wife of a Director sold 10k only - minnow , another handbag and a pair of shoes.
But market is now doing its usual round of speculation on BOE announcement and speculating on low inflation, delay to interest rate rise and global growth slowing. But still leaving uk ahead of most or all in Europe . And wage increases appearing but nothing dramatic. Pound perhaps a bit weaker. But the players love the red button . Carney giving it as it is and way ahead of his predecessor in ability For the average consumer , stability and a longer term outlook to work on. For the City more to speculate, but again they are much better off than with MERV. City makes money on driving it up and down across the board. It matters not what the individual Company is doing unless it is losing , then it gets hammered more. Tomorrow they will worry about Cold wars the Ukraine, China , Iraq and soon Obama.

[beercapafn] 12/11/2014 10:48

thanks for reply's.

[allch2] 12/11/2014 10:40

Noticed wife of a director sold a few yesterday

[mikeran] 12/11/2014 10:26

they now have it where they want it for the morning, will follow the DOW down this pm or just mark time.

[mikeran] 12/11/2014 10:14

The players do not need any excuse these days. Easy to drop on low volume and Computer HFT.
The players follow like sheep and much of this starts in the US. HL has been upgraded recently with a target price of 1140 and business looking good , with more to come on the Pension Changes next year.

[beercapafn] 12/11/2014 09:30

Can anyone say why the drop this morning.?

Jim

[mikeran] 10/10/2014 22:52

RBC have played to their "WE BELIEVE " analyst agenda well as the HFT performed with Wall st and its global worries and low volume to trouser some of the HL share price I wonder what is their next target of as they plough through solid Companies. time the securities agencies US style as well as FCA took note . its too easy on no volume using HFT . This was overdone RBC to the point of being single handed and obvious, and against a solid company performance.

[allch2] 30/9/2014 16:49

Not sure they purchased them all at the same time, probably just bought a few to take them above 5 per cent which means they have to announce it

[mikeran] 30/9/2014 13:03

Does not surprise me, the medium long term value is there. But it was dumped down nicely to open that buying window. A good buy at That price.

[mayzerg] 30/9/2014 11:43

Baillie Gifford & Co has purchased 28 million shares for a 5.04% stake in the business.

[mikeran] 25/9/2014 12:32

Price target impediments -- I see nothing in the above paragraph which sets out the continuation of a theme of "we believe , and if , or the risk should that happen to disguise an agenda written for that style. Equally based upon what has been written the converse could apply. But the agenda has been set and is being worked to . Following of course that downward trend following results as already being in place. The timing by RBC was impeccable. Presumably adding to the planned short agenda.
this mornings drop was again impeccable and managed on such low volumes.

[robinnicolson] 25/9/2014 12:06

More on that RBC downgrade:

The shares have derated significantly YTD but continue to trade at a premium multiple to the diversified financials sector. HL remains a quality company in our opinion but the upside is limited by ongoing concerns about valuation and competition.

From reaching an all time high in January 2014, HL’s share price has fallen by 38% to hit a recent low of 964p on 24 September 2014. The FTSE 100 index (HL is a constituent) has declined by 2% over the same period. We misjudged the extent to which the market’s concerns about RDR 2 compliant pricing, HL’s ongoing ability to attract flows and downward pressure on the average interest margin would negatively affect the share price in a catalyst light period. We believe HL's underperformance has been particularly pronounced since it is a higher rated company, which in our opinion faces a greater risk of derating. HL has traded as high as 36.5x 1-year forward earnings in January 2014.
In our opinion, HL remains a quality company. We forecast that the operating margin should remain in excess of 70% throughout our forecast horizon and we forecast an underlying diluted EPS CAGR of 13% between FY14A and FY17E. We acknowledge that increasing competition poses a risk to HL’s ability to attract net inflows, but we note that between September 2013 and March 2014, despite a wave of new entrants, HL has in fact grown its market share of the direct-to-consumer platform market.
We believe potential upside is limited by HL’s premium valuation. The shares currently trade at 24.3x CY15E EPS, which despite the stock’s significant derating YTD, remains a premium to the diversified financials sector, which trades on average at 13x CY15E earnings. We believe potential upside is limited by HL's high valuation compared to the diversified financials sector, since we believe the market is awaiting clarity on HL’s improved cash offering and since competition continues to intensify in the sector, which we believe poses headline risk to the share price.
Price target reduced by 35% to 1075p. We continue to use a DCF to value HL in the absence of a compelling peer group for the stock and since its cash flow generation is high and predictable. We use a CAPM model to derive 8% as our cost of equity (equal to the WACC since HL is debt free). We reduce the perpetual growth rate in our DCF to 3% (previous: 5%) which accounts for the entirety of the reduction to our price target. Our 1075p price target implies a CY15E EPS multiple of 27.1x, which is inline with the average one-year forward P/E multiple over the past two years.

Valuation:
· As the only listed UK platform business, we do not believe that HL has a direct peer group. Therefore, we do not believe that a comparable multiples approach is appropriate to value the company.
· We acknowledge the fact that the outcome of a DCF is manipulated by its inputs, and this is precisely the reason why we do not use it to value any other companies in our coverage universe. However, we believe it is the best alternative to value HL in the absence of compelling comparables. In our opinion, a DCF approach is appropriate since HL’s cash flow generation is high and predictable. We forecast HL to convert nearly 100% of profit after tax to free cash flow in FY15 and FY16.
· Since HL is debt free, the WACC is equal to the cost of equity. We use a CAPM model to derive 8.0% as our cost of equity and use a perpetual growth rate of 3.0% (previous: 5.0%) in our DCF. Reducing the perpetual growth rate from 5.0% to 3.0% accounts for the entirety of the reduction to our price target, since the changes to our forecasts are small (we make 2%-3% reductions to our net revenue forecasts).
· Our 1075p price target implies a CY15E EPS multiple of 27.1x, which is inline with the average one-year forward P/E multiple over the past two years.

Price target impediments:
HL continues to trade at a high multiple, and, therefore, faces a greater risk of derating compared to the sector in a market downturn or should the level of growth disappoint.
Competition is high and could accelerate customer attrition at HL. We believe that in the UK, there are currently ~30 different companies offering investment services to the DIY investor and the number continues to increase. We believe competition should increase as the UK savings and investment market continues to grow, and since a structural shift is underway in the UK retail space, toward DIY investing on platforms. The investment and customer service propositions offered by HL’s competitors are becoming increasingly sophisticated and comparable to its own service, which could cause customer attrition to accelerate.
Regulation could increase the costs of doing business and reduce investor appetite. We also believe that changes in tax law could affect the attractiveness of some of HL's investment products, including ISAs and SIPPs.
A prolonged downturn in financial markets could reduce demand for HL’s services. We believe that retail engagement in financial markets tends to increase with positive market performance and low volatility. Adverse market conditions may affect the value of HL’s existing AUA and could result in increased demand for advice-based investment models, rather than the DIY option offered by HL through Vantage.
nsider selling could weigh on the share price. We believe that management, the founders, and staff own ~50% of shares outstanding. We note the risk that selling by substantial holders could weigh on the share price, particularly given the incidence of large single transactions in the past. Most recently, on 26 March 2014, Stephen Lansdown sold 14.5MM shares (3.1% of shares outstanding at the time).

[mikeran] 25/9/2014 11:04

Hargreaves Lansdown PLC dropped 3.6% after RBC Capital Markets cut the asset manager to sector perform from outperform.

as I said an analyst working to his company agenda Read the words "We Believe"
The market players love this headline news - push the red button and that style of news is planted to gain that effect.

[robinnicolson] 25/9/2014 10:11

This is the reason for the share price drop this morning:

* Hargreaves Lansdown hits a year-low as RBC questions company's valuation.
* Shares down 3.4 pct to 930p after falling nearly 5 pct in early trading.
* RBC downgrades to "perform" from "outperform", cuts target price by 35 pct from 1650p to 1075p.
* Shares have fallen 38 pct since hitting all-time high in January this year.
* Still trades on a forward P/E of 25, twice that of other asset managers and diversified financials.
* Traded as high as 36.5 times earnings in January.
* "We believe potential upside is limited by the stock's valuation, which remains high compared to the diversified financials sector... competition continues to intensify in the sector, which we believe poses a headline risk to the share price," RBC said.

[mikeran] 25/9/2014 09:49

shorting to meet an agenda- easy to do by HFT on low volume.

[tominator10] 25/9/2014 09:19

can anyone speculate as to why this is going down? My analysis suggests it should be on the rise.... I think this is a good entry point with IMS mid Oct.
I thinking im looking for morale support on this...

[m w] 23/9/2014 18:37

Very good set of results, £10 tomorrow

[mikeran] 16/9/2014 15:52

cant see much genuine buying here , a few reasonable size sells but a lot of Hedgie hft work and sell bots. But maybe the rumour might be true about a Bid in the wings. we will perhaps have to wait until after the friday result up North. More volatility will shape the share price again.One shop stands out in this Liberium capital.

[mayzerg] 03/9/2014 17:38

People are selling on good news as the volume is there, don't forget the stocks are still overvalued by like 30-40%.Just keep adding on dips or wait for it to go lower, company's balance sheet is amazing with 98% ROCE with no debt.

[mozy123] 03/9/2014 13:09

Yes - 31 times earnings - lots of growth already priced in here.

[broadwood] 03/9/2014 09:35

Yes, just noticed that.

Temporary dip I think.

[allch2] 03/9/2014 09:33

Dont know but doesnt eps of 34.2 still put them on pe of over 30, btw numis downgraded to add from buy yet lifted price target from 1220 to 1277, bizarre