Hargreaves Lansdown Share Discussion Threads

[lomax99] 16/2/2023 18:08

An opposing view:Peel Hunt: Hargreaves' valuation omits its long-term prospectsThe valuation of Hargreaves Lansdown (HL) shares does not take into account the long-term prospects for the UK's largest investment platform, says Peel Hunt.Analyst Stuart Duncan retained his 'buy' recommendation and target price of £12.20 on the stock, which fell 6.8% to 883.6p on Wednesday.The group pledged to increase its dividend after a 30% jump in profits and 20% rise in revenues in the final six months of 2022 despite market turbulence.However, the weaker investment outlook has seen inflows remain 'weak', according to Duncan, but this will be partially offset by interest tailwinds, which were 'significantly higher', and 'margins are guided to improve for the full year'.'Investment spend continues, building both new solutions as well as delivering efficiencies,' Duncan said.'Hargreaves is benefiting from higher interest rates, with guidance on cash margins likely to lead to high single-digit forecast upgrades.'He added that the stock is trading on an enterprise value of 'just 13 times' earnings before interest and tax, a low multiple which 'in our view, does not take account of the long-term prospects'.

[edwardt] 16/2/2023 10:34

Stick it in a money market fund and get a decent rate if you want cash.

[ochs] 16/2/2023 08:17

I don't see the relevance of 950p as we steamed past that 1st thing y'day, so target on the upside is now 1024p (y'day high).

On downside support is around 845p, just below yday's low of 855p.

[inv] 16/2/2023 08:13

Agreed. 950p this morning

[jubberjim] 16/2/2023 07:04

Chartists

Am I looking at a double top at 950 yesterday

If so where do we go from here

[growthpotential] 15/2/2023 22:24

That is fine for me, I get a competitive deal, the best on the market and HL get a cut for providing that best rate and for supplying the platform and the customers to do so and command such a high rate

[ochs] 15/2/2023 21:27

It's great business for HL. Clients could invest that money but many choose to hold it as cash for security reasons.

[porsche1945] 15/2/2023 17:44

Half the income now coming from interest. Doomed. Another vod or bt, terminal decline type biz, time to hit a perma exit, will be a sub a fiver share in time, Vanguard are gonna wipe them out. Im not even trading tbis now, new ceo….deckchairs/totanic.

[ochs] 15/2/2023 17:29

It's been an issue for a few years now, but is very gradual. Most SIPP clients opt for Drawdown rather than Annuities so remain on the platform.

The area where business is often lost is when one person in a family dies (for example the husband) and the widow is unable to continue operating a DIY portfolio; so a large amount gets moved to a competitor such as St James's Place. This is one reason why HL are keen to beef up their advice proposition in order to retain the big portfolios of older clients.

[growthpotential] 15/2/2023 16:49

Anyone have any insights into this? I do not think this is anything new, pensioners will either DIY something or pick other products such as annuities. With respect to younger investors, I guess we need to decide me what's the strategy; go for lower fees and hope for huge volumes or what we have at the moment

[stoopid] 15/2/2023 14:31

Looks like market can't decide if Jefferies are right about new investors and reducing revenues or HL are right with increasing profits and retaining investors...

[stoopid] 15/2/2023 14:01

Downgraded by jefferies. They have a price target of 800, saying HL have a structural problem in that their client base is old, and they are not attracting enough of the under 40's.Vanguard seems to be the fund manager snapping most of them up....

[cohenra1979] 15/2/2023 11:41

Crazy movement today on the results.......what is going - who knows....15% swing...day traders dream just not mine

[growthpotential] 15/2/2023 11:22

I feel like I'll be holding this forever but that was the plan!

[lomax99] 15/2/2023 10:50

That's more like it!

[lomax99] 15/2/2023 09:07

The reaction has been miserly, at least it justifies the recent run.

[ochs] 15/2/2023 08:12

Hello £10 a share... we've missed you!

Edit - well that didn't last long... but at least it's now consolidating around yesterday's highs (960p).

[lomax99] 15/2/2023 07:58

No doubt the market will not like it, but strong numbers from HL today. AUM is down 10% at £127.1bn, however Revenue is up £58.9m, 20% whilst Profits are up £46.4m, 31%. Active Savings now hold £6.3bn.

[ochs] 15/2/2023 07:56

Yes, looks strong, profit and divi up, although net new business down, but still growing. Margin on Active Savings nearly trippled and assets held in that service also up.

[oggyrocks] 15/2/2023 07:05

Very good results today.

[ochs] 14/2/2023 10:09

Gonna be interesting with results announced tomorrow. US CPI comes out at 1:30pm today and will probably move markets.

We've broken through the early Feb high (952p) this morning, so next target should be the high from Aug 2022(988p). After that it's the March 2022 high of 1,069p.

[lomax99] 14/2/2023 07:59

Cash held will be beneficial to HL., this was FT's recent comment on Schwab (who also have a diversified model):

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Charles Schwab: woo you, we’re from Texas
Charles Schwab is best known as a discount brokerage and a pioneer of low-cost investing. But over the years it has transformed itself into one of the largest banks by deposits.
Schwab’s latest results underscored the importance of this shift. The pandemic-era retail trading boom is over. Small investors are not trading as much. But the Texas based firm is still making plenty of cash – as a banker.
The sharp rise in interest rates last year helped generate $10.7bn in net interest revenue at Schwab in 2022, a 33% jump from the prior year.
Net interest revenue accounted for more than half of the company’s total net revenue last year. Trading, by contrast, generated less than a fifth.
Schwab therefore raises the same questions over peaking net interest income as Main Street lenders. Free trading and click services give clients incentives to park cash with Schwab. The worry is that they will now chase higher returns.
At Schwab, these come in the form of something called “cash sorting”. This is when clients move their assets into higher-yielding cash and fixed income alternatives. Some $279bn were parked in Schwab money market funds as of the end of December. That is a 90 per cent jump from a year ago and is more than twice the $126.6bn in Schwab bank-deposit accounts.
A year ago, deposits stood at $158bn while money market funds had just $146.5bn. While Schwab earns fees from money market funds, it earns less than what it would putting clients’ idle cash to work itself.
Worries over its deposit base dragged Schwab shares down more than 3 per cent yesterday, cutting its market cap to $150bn. But its shares remain up nearly a third over the past six months, compared with the 1 percent gain for the KBW Bank Index.
Investors should take the long view on Schwab. It has an attractive diversified model that also embraces custody and wealth management. Overall, it looks like a winner.

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Schwab's PE rating is significantly higher than HL's, they themselves had a dip to a mid-teen's PE in 2020. If they had any ambitions to expand abroad, HL., at a fraction of their value, may be tempting.

HL's half year results are announced tomorrow.

[growthpotential] 02/2/2023 23:38

HL gonna boss it on the cash margins, surely