Hargreaves Lansdown Share Discussion Threads

[giltedge1] 30/5/2024 08:15

Agree too soon to sell, another bid possible, shorts to close, still not generally expensive.

[lomax99] 29/5/2024 10:08

Tempus:

Even after the bounce last week, shares in Hargreaves still trade at a forward price to earnings multiple of 16. This marks a sharp increase from a multiple of 12 a few weeks ago, but is still at around historic lows — only five years ago the stock traded at a multiple of 23. It is easy to see a value argument, though the income element alone may be enough for investors to sit up.

The stock offers a forward dividend yield of 4.1 per cent. There is plenty here for a private equity investor to like: buying Hargreaves would give them a leading position in the market, via a household name with strong cashflow and no debt. If nothing else, the takeover interest around Hargreaves, as elsewhere in London’s market, suggests a clear value opportunity.

Advice Buy

Why Market leader with improving platform, attractive dividend and in value territory

[stoopid] 29/5/2024 09:06

I agree, the share price has stayed around 10% above the offer price since all this was disclosed. This could suggest that some investors believe that a second more palatable offer for HL will come before the deadline of 16.06.2024 I don't reckon it will be much more though. 1200 maybe? They appear to want HL on the cheap and I doubt the consortium will be willing to pay too much more. I reckon it was known a bid at 985 would fail and was just the opening shot.Investors Chronicle are suggesting that this is just the opening round and that even a bid of 1220 (a PE of about 17) would be optimistic? 1220 is Peel Hunts' price target apparently.

[lomax99] 29/5/2024 08:58

The Times Tempus column today have this as a buy.

[growthpotential] 28/5/2024 20:33

Probably will be proved wrong in this case I feel...

[dexdringle] 28/5/2024 16:26

It's never wrong to take a profit.

[bend1pa] 28/5/2024 15:11

Decided to sell. Too tempting. Can't complain about this price, which I didn't expect to see just 1 short month ago. GLA.

[stoopid] 28/5/2024 07:11

There well may be a raised offer with the positive signalling of two of the main shareholders in the last week.Who knows what that might be though. Will get interesting if another party gatecrashes the bidding though.

[lomax99] 28/5/2024 06:39

Hargreaves bid reflects unfair valuationThe bid for Hargreaves Lansdown (HL) made by a consortium of private equity reflects its 'lowly valuation', says Shore Capital.Analyst Vivek Raja retained his 'buy' recommendation on the Citywire Elite Companies AAA-rated investment platform, which jumped 21% to £10.85 last week after it rejected a £4.7bn offer on the basis that it undervalues the business.'Though the stock has rallied meaningfully from a trough of less than 700p in March, a 12-months forward price to earnings of 15 times and dividend yield of more than 4% is low by [its] historical context,' he said.'Hargreaves' extensive and sticky client base straddling 40% of the UK direct-to-consumer platform investing market is valuable.'Although he noted the rate of customer growth has slowed in the past few years, Raja said the 'long-term growth prospects are underpinned by UK wealth formation and the need to save, the shift towards self-directed investing, and the shift of assets from non-platform schemes to investment platforms.'Within the platform space, Hargreaves is producing high-quality earnings and offering good cashflow visibility, which Raja said would have made it attractive to the consortium in the first place.

[mayers] 25/5/2024 14:56

Apologies if I have missed information. Outside Peter Hargreaves' 20% of the shares do we know what balance of shares there is between IIs and PIs? I would think the majority of PIs would be opposed to Private Equity taking over because of the ISA status with its avoidance of Income and Capital Gains Tax. Perhaps only those that bought at a very low share price would be interested.

On stagvalley's reference to moving at least some money, is it possible to move individual stocks to another broker as opposed to the account as a whole? I foresee an enormous issue for ii and Bell if transfers are made by the very large number of HL holders. Do posters have experience of Fidelity and its ease of buying and selling? I rarely seem to see reference to them.

[guman] 24/5/2024 10:18

will it bounce back after 3pm?

[stagvalley] 24/5/2024 08:02

I think those who have all their eggs in the HL basket feels safer with a listing and no debt. Although client investments are ringfenced, I cut out an article about a much smaller company that went into administration and the administration fees were set to be paid from taking a slice of client investments. I don't know what became of that - does anyone know? -but I would move at least some money if HL is taken over by a PE firm and saddled with debt as I am yet to be convinced that guarantees on client investments are watertight in the event of the company going into administration.

[ochs] 24/5/2024 05:23

I suppose ultimately Hargreaves paid 'zero' for most of his stock which he received when founding the firm so that may explain him not needing such a high price and finding the offer 'interesting'.

I think HL are very rare to be a listed firm with no debt - I'm sure rival ii (owned by abdn) have debt, although I'm not sure about A J Bell?

[natasonline] 24/5/2024 00:18

Nearly everyone that has bought this stock since 2013 has paid significantly more than the laughable offer price. I've owed a few stocks in the past that have been bought out and they've all achieved well above current market price to make it palatable for current holders to accept. It's scary for me that Hargreaves himself finds this offer 'interesting'.

[growthpotential] 23/5/2024 23:17

No, I would still shop at Asda but the difference is that a broker is more financially attached to you. Although client money is ring-fenced it feels better if the broker has no debt. If it's taken private, in theory I could still use them if they had no debt, but I would have no additional incentive to ensure I use HL myself either as I would no longer own a stake in it. Emotionally though, like another poster, I am looking to hold this for the long run and have paid a much higher price, around mid 1400s

[growthpotential] 23/5/2024 23:09

Reports suggested Hargreaves was open to taking the firm private but he told the Mail: that's a lie. I have never said that.

[ochs] 23/5/2024 21:33

@GrowthPotential - Do you no longer shop at Asda because it is saddled with debt since being bought out? Surely it makes no difference to you as a client trading funds and shares whether HL is privately owned or listed or whether it has debt?

[m_kerr] 23/5/2024 19:08

THe way I sum this up is its a company that is in a bit of a difficult spot profit growth wise, hence the massive rearing downwards over the years.

IT is however a company that has advantages that are extremely difficult to replicate, in an attractive growing industry.

If its an easy fix for PE, its an easy fix for competent management. If I was the board I wouldn't consider discussions unless a material premium was given above where it's at now. The bidders have timed their bid to capitalise on a share price lull.

[eigthwonder] 23/5/2024 18:53

If Hargreaves is offered a sizeable stake in a buyout vehicle we might see a bid and we could be disappointed at the price as he wouldn’t be motivated to max out

[danb45] 23/5/2024 18:12

maybe it's worth a punt on other providers because there's a hell of a lot of funds that might be pulled out if the wrong buyer wins... but you'd think the FCA will have their eyes on any potential deals - whether they have any influence I'd have to look into ?

[danb45] 23/5/2024 18:08

I've got a hunch no bids will be high enough for them to sell but happy for it to rise in the meantime !!

[growthpotential] 23/5/2024 17:46

It would be delisted and most liked the new owners would saddle this with debt hence why I'd move my accounts. But hopefully this stays listed and as it is

[ochs] 23/5/2024 17:29

Why @GrowthPotential and @DanB45? Prior to 2007 it was a highly profitable and successful private company - so with the right management going forward being private wouldn't necessarily be bad for existing clients - although it of course depends who the eventual owner is.