Assetco Share Discussion Threads

[theaim1990] 26/7/2024 11:21

hxxps://ebi.co.uk/wp-content/uploads/2024/07/Press-Release-3-Billion-AUM-18.07.2024.pdf
this is growing v fast. +1bn AUM in 1y, +0.5bn since March, now c.25% of total AUM in parmenium group

[sphere25] 25/7/2024 11:45

This is good. Thank you all for posting.

Meat to the bone jobbler stuff!

When I don't know enough, I just follow the market. If there is a big enough clearout here, those market makers will start moving in a hurry.

At the current bid-offer of 34p-36p, it is very evenly balanced so the market is content here at 35p. I am looking for that skew where the demand imbalance comes in on the back off some big buying and it exhausts the sellers in size.

Don't know what the magic number is for that, but the buying here is interesting. Yes, they are all two-way exchanges, but Harwood are coming in to try and clear stale Bulls.

If that clearout happens, the bid offer will shift rapidly to 35p-37p and the offer will get closed at 37p quickly. The bid will follow higher and technical levels of 38p and 40p will get breached for a spike into the 40's. It has a history of sharp moves on nothing volume.

So that is what I can add from the technical shorter term perspective.

Let's see if anything big happens at some point. Hopefully just doesn't sit here as a boring stalemate.

All imo
DYOR

[theaim1990] 25/7/2024 11:16

I like what you said Catabrit, a couple of points:

assuming the matched bargain facility in place, then Assetco would only own c.4.5m shares of Parmenion (the shares in Treasury), correct? If so that's worth (assuming a sale) say 2m, not too much in terms of (hit and miss) dry powder.

In terms of cash, net of the 7m paid for SVM and the 1.8m for ODAM, outflows were around 5.4m, 4.4m excluding 1m not recurring. Reasonable H2 to be around 3.5m recurring? That'd imply run-rate costs above 18m (so above the company expectations), and also before the additional 2/3m + 0.6m of back-office efficiencies.
With next year revenues of 15m(ex the 2.3m PIK of income from parmenion), and costs going below 18m, then cash position should be somewhat stabilising at around 7/7.5m in light of the 2.65m are due from ARK by 31/3/25.
That of course excludes any reduction/increase in AUM, but also any JV.

[catabrit] 25/7/2024 10:08

I agree on the cash position. They need a buffer for regulatory purposes and they are a bit too close to that for my liking. So any redemptions will result in further pressure on that regulatory capital position.

[arthur_lame_stocks] 25/7/2024 10:05

I decided against making an investment here for a number of reasons.

Firstly I already have a lot of WCW which I reckon has better potential upside.

I am also worried about the cash position of the remainder post the demerger considering the ongoing losses.

[catabrit] 25/7/2024 09:48

Hello Sphere. Yes some chunky trades going through and barely any move in the price. If you put a 10-12x EBITDA multiple on Parmenion then there is clearly value here. It has an excellent reputation in the market (my private office happens to be next to that of a small wealth manager and he was very positive about them) and the CEO is very widely regarded. He knows the platform market inside out.

So with that multiple you are looking at anything from 180m to 220m valuation for Parmenion which nets back to say 60-70m pro rata for us so 20-40 percent upside from here. The good thing is that the business continues to grow so if there is no liquidity event then our pro rata valuation should continue to compound.

On the negative side, the exit is not in assetco’s control. They are a minority investor and preservation capital control the entity. So you need to discount that value a little bit for lack of control and no visibility on timing. Then you also need to think about what they would do with the proceeds. Martin’s record on that front is a bit hit and miss. Will he roll the dice with most of the proceeds or will he do the most shareholder friendly thing which is to return capital? It is hard to say. He seems quite defensive about the wider strategy and is potentially (in my opinion) in denial about the odds of his strategy working.

Furthermore, the river global business is still loss making and there are only so many levers the guys can pull to cut costs. Gary the CFO is excellent and I really rate him. So you get a free option on River Global but I think you need to as the business is sub scale and really needs flows to continue as a going concern.

You also have the very real risk of this potentially de-listing. I can’t believe the listing headache is worth it and it is clearly a busted roll-up.

So whilst I recognise the value here I don’t think Mr Market is being entirely irrational.

[sphere25] 25/7/2024 08:53

Continual anomalous activity here. Another sizeable block of 1.18m has gone through at 35p. Is this just Harwood continuing to buy pretty aggressively in the market?

They are keen here. They are rated as shrewd by many so just wondering if this is worth a little watch. I don't know what it is worth, but happy to ride along if it looks like popping higher.

At the moment Harwood have been able to move from 14.41% to 16.52% without the price barely batting an eyelid so clearly sellers in size are still at work in the market. That block today is near another one percent being picked up, but still no movement.

If Harwood keep buying, and others follow, it might eventually pop.

Despite the bull market flowing through smaller caps, still have loads of these lagging shares about. Mentioned PGH yesterday and there is still some large sellers at work there so a few clearouts needed and I suspect these lagging shares that hit guidance will start motoring.

How many more of those blocks is it going to take here?

Show us some whoppers so the market can get abit excitable!

Just watching from the sidelines.

All imo
DYOR

[catabrit] 23/7/2024 16:18

Parmenion have just released their annual report. Net cash from Operations was 19m, EBITDA was 17.8m and operating profit was circa 16m.

[ohisay] 22/7/2024 15:58

In other words, shareholders receiving one share in Parmenion for every AssetCo share held will hold an investment that should be worth more than AssetCo’s current share price. A circular outlining the demerger process will be published in the current quarter and the Parmenion shares are likely to be traded on a matched bargain basis.
The directors also plan to change the name of AssetCo to River Global

[tommygriff] 10/7/2024 16:33

Pretty good write in this weeks IC as well

[west mercia] 03/7/2024 17:34

Harwood Capital (Christopher Mills) increased their shareholding from 14.41% to 15.29% - another 1,250.000 shares - since the Interim Results were announced. Christopher Mills is a Non Executive Director and a shrewd investor so a very positive sign.

[catabrit] 30/6/2024 15:55

That is correct WJC. You cannot hold unlisted in an ISA. ii let you hold unlisted shares in a trading account. Think it is fine in a SIPP too as a few of the Allied Minds shareholders have theirs via their SIPP.

[privileged] 29/6/2024 13:15

Any idea what would generally happen then in such instances? If asto is already in my SIPP. Guess they just sent me the share cert separately in my name for Parmenion (and then what happens for the cost for cgt I wonder...)

[wjccghcc] 29/6/2024 10:28

Depends on your provider. Pretty sure you can’t hold unlisted stocks in an ISA and I don’t think the big SIPP platforms like HL or AJ Bell let you either.

[privileged] 28/6/2024 20:38

Will it work in SIPP?

[catabrit] 28/6/2024 19:29

Yes but I think there will be decent demand for them so you can sell via the matched bargain facility they are going to create.

[wjccghcc] 28/6/2024 16:37

Also, the Parmenion share class will be unlisted.

[tommygriff] 28/6/2024 16:31

Still cashed at £25m

[catabrit] 28/6/2024 09:04

Interesting news re the separate share class. Kinda makes sense albeit I wonder if the River Global trading stock tanks once people take their Parmenion share class.

[tommygriff] 28/6/2024 08:43

Getting there by sounds of it

[privileged] 14/5/2024 23:20

Something has caused a recent rise it seems.

[catabrit] 14/5/2024 19:50

Just adding a nothing comment to keep tabs on the thread. Recently bought a big chunk of these. Understand the issues well and think investor scepticism is warranted but I think you get well rewarded under multiple scenarios so I bought some.

[ohisay] 29/3/2024 05:54

Recommended again couple of weeks ago .

Moreover, following press speculation that Parmenion’s majority shareholder, Preservation Capital, is looking to sell, AssetCo’s 30 per cent stake has been independently valued at £75mn-£90mn (52.6p to 63.2p per share). This implies a conservative-looking cash profit to enterprise valuation multiple of 12 to 13 times. The investment is held in the group’s accounts at £24.6mn.

True, AssetCo’s share price has drifted since I analysed the investment case (Alpha Research: 'Target recovery upside from a deep value asset manager’, 30 November 2023), but the stake in Parmenion and its cash pile are easily worth more than double the group’s market capitalisation, and potentially far more. It leaves a fund management business that is operationally geared to any improvement in market sentiment in the price for free. Buy.