Cerrito17 Jan '25 - 10:07 - 244 of 244
We note that 70% of the share price is now explained by the balance sheet surplus capital of the group, and implicitly only 30% from the future operating earnings.’
--------------------------------------------
Hence fact that EV is so much cheaper than mcap, given that the latter is constructed by adding debt but subtracting cash...? And on that basis the share is cheaper than its mcap might suggest, and the other four shown above. |
 From Citywire this morning
quote
Specialist emerging market asset manager Ashmore (ASHM) has seen some improvement in fund flows but Deutsche Bank warns the outlook for the group is still difficult.
Analyst David McCann retained his ‘hold’ recommendation and target price of 150p on the Citywire Elite Companies A-rated stock, which was trading down 3% at 151p at the time of writing on Thursday, taking its 12-month decline to 32%.
A second-quarter update showed assets under management were in line with expectations and ‘net outflows were actually slightly better than we and consensus expected’, said McCann, while the management commentary ‘talks to investors recognising the attractions of emerging markets, notwithstanding̷0; more volatile market conditions in emerging markets’.
McCann said there was ‘reported improvement in a relatively difficult backdrop in the quarter’ but that the ‘short- and medium-term outlook is unfavourable’.
‘However, we think the share price fairly reflects this, driving our “hold” recommendation. We note that 70% of the share price is now explained by the balance sheet surplus capital of the group, and implicitly only 30% from the future operating earnings.’ |
Thanks for that Brucie5.
As a REC holder I personally do not think there is much comparison of REC and ASHM.
Given the speciality of ASHM the fact that their AUM/Marcap ratio is double that of LIO does not raise my eyebrows. |
Some AUM vs mcap and EV ratios that I've knocked up. Showing in descending order of cheapness. I don't currently hold REC, which has rather hybrid business, so not strictly like with like though it is described as an 'asset manager'.
IPX 34.1bln/268 mln =.78%
REC 106bln/97mln = .92
LIO 25 bln/259mln =1%
ASHM 49 bln/1bln =2%
POLR 24 bln/491mlm =2%
Same exercise, using Enterprise Value (MCAP + debt -Cash) gives me the following order:
(167m) IPX .49%
(316m) ASHM .64%
(167m) LIO .67%
(82mln) REC .77%
346m) POLR 1.45%) |
This stock is really interesting. Once China is out of the woods, EM easily can double and ashmore triple.
I think it's not about if but when.
I'm optimistic on China and Trump can´t shoot on his feet. |
The management is urging us to look a few step beyond. I share that view. |
Further decline in AUM |
You will have seen that last Thursday we were told that the EBT had increased their holding to 8.1%, which is pretty high.
Why do I flag this??
Paul Scott in his yesterday Friday Substack flagged the issue of Anpario, a v much smaller company where the EBT has 18%.
His point is that while in some ways having a EBT as a holder can suggest a good alignment of interests between shareholders and employees, one should investigate to what extent we are having employee compensation which does not go through the P&L. The cost to the company of buying these shares goes through the cash flow statement- and indeed last year shares were bought by Ashmore for the EBT.
Not the most important thing to consider when contemplating buying more Ashmore and something I need to look into but worth a place on your radar screen. |
All made up to bring price down |
Morning Cerrito and all. I'm looking to buy a few more myself. I'm below water here at a c25% loss and not best pleased. Wall Street tumbled a bit yesterday and next week may be a bit choppy so there may be an opportunity to pick a few up at a good price. Maybe thought it would be best to wait for DTrump to get elected and hear what he has to say about China (and by effect the Far East). If he's a bit financially belligerent towards China I'd expect ASHM to be effected negatively and then may be the time to buy? You're views would be welcome to me. Certainly a good company in, relatively, good shape that can ride out a lot of turbulence. Enjoy the weekend posters and keep warm!. Time for lunch. It's soup. Mmmm. ALgent. |
Poking around to see if I should buy more.
Wondering how they would benefit from recent sterling weakness against the USD.
Answer it appears not much.
As per page 34 of their Presentation of December 2024, a £2m PBT for 5c movement in £/USD rate. Note that in FY to 6/24 PBT was £128m.Remember in FY to 6/21 it was £282m. |
Bought in today at 146p. GLA. |
Reason for today's drop:
JPMorgan cuts Ashmore Group price target to 152 (155) pence - 'underweight'
Jefferies cuts Ashmore Group to 'hold' (buy) - price target 170 (220) pence
Jefferies note in more detail:
Jefferies downgraded Ashmore on Wednesday to 'hold' from 'buy' and it cut the price target to 170p from 220p as it said it was moving to the sidelines until a macro catalyst emerges.
The bank said macroeconomic and geopolitical uncertainty has continued to weigh on emerging market (EM) flows, and it now expects the fund flow inflection for Ashmore to take longer to materialise. It forecasts net new money to turn positive in FY 1H26.
"Geopolitics and uncertainty over the path of Fed rate cuts have led to renewed uncertainty for emerging markets," Jefferies said.
Jefferies said the market is currently pricing in Fed rate cuts of only 65 basis points in 2025, down from 140 basis points at the end of September,
"We expect this to continue to weigh on demand for EM external debt funds as the yield differential versus Treasuries becomes less attractive," it said.
"For EM local currency debt, the significant strengthening of the USD since end-Sept is likely to continue to be a headwind. The outlook for EM equities, meanwhile, remains uncertain, as potential new US tariffs could disrupt supply chains and weigh further on investor sentiment."
Jefferies said it expects a deterioration in net new money for Ashmore, consistent with macro flows, as well as negative mark-to-market.
"Recent share price weakness and fundamental support - excess capital is 50% of market cap and 10% dividend yield looks secure - limits further downside, but we downgrade Ashmore to hold as our new 170p PT offers insufficient upside." |
Crikey it's lowest share price in 15 years. What on earth is going on here. |
Nice dividend received. ASH bumping along the bottom certainly has its uses! |
Was a good opportunity a few weeks back to take profits at circa 220p |
*DEUTSCHE BANK RESEARCH CUTS ASHMORE GROUP TARGET TO 150 (170) PENCE - 'HOLD' |
Bought this afternoon 173p I think the trump comments are valid but these businesses will be ok medium term. Divi cover yes tight but like a few other companies hoping they maintain to avoid a price riot. I’ve sat and waited on similar shares over the years it might go to 160p but equally could go back over 200p. Over 5 years this is down a massive amount so hoping the share price falls are almost done Cheers |
Like a lot of companies on the market I look at , initially its the prospective yield that draws my attention.
So when I glanced a while back at about 170 seemed a high yield , then it rose and I thought oh well missed the boat.
However the dividend seems possibly unsustainable and I guess the market is perhaps pricing in a cut and has its worries about EM.
So back to around 170 - are they now cheap enough ?
What % of their FUM are in EM ? |
A good question as to why I am not buying more, pete.
The short answer is that I am waiting to see what a Trump world will look like given that, big picture, the straws in the wind are not encouraging for emerging markets. Indeed as I write this I ask myself why I did not sell pre election.
Yes we should not base our decision to hold or buy on the 16.1p annual dividend given that diluted eps was 13.55p this last year and 12.15p the year before and indeed adjusted diluted eps this last year was just 10.5p.
Incidentally on a crude p.e basis even at these prices the shares are not undervalued.
I note the annual dividend costs £120m and buybacks in the last 2 financial years were £14m pa approx. They have just bought back £3m shares YTD.
I also note that their capital requirements are £96m compared to their actual capital of £696m.
I do not see myself selling at these prices, basically I have v little direct EM exposure as have most of my EM exposure in this share.
PS
Perhaps the dividend policy is set to suit Mark Coombs' tax position and if so fair enough if one has one's eyes open. |
To repeat my question, a different way.
Tremendous yield, but
Is anyone confident to buy at this level?
pete |
They can't afford to maintain to pay the current dividend out of the profits they're making. Don't you understand EPS and dividend cover?
spud |
800m assets, 1.2bn mcap and you think it can't afford a dividend - ridiculous! |
The dividend isn't well covered (if at all). They need to cut it, probably by a third. |
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