Hargreaves Lansdown Share Discussion Threads

[beercapafn] 12/11/2014 09:30

Can anyone say why the drop this morning.? Jim

[mikeran] 10/10/2014 21:52

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 15:49

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 12:03

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 10:43

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

[mikeran] 25/9/2014 11:32

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 11:06

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 10:04

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 09:11

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 08:49

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

[tominator10] 25/9/2014 08:19

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 17:37

Very good set of results, £10 tomorrow

[mikeran] 16/9/2014 14:52

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.

[jeffcranbounre] 09/9/2014 18:19

Is this small cap the next Hargreaves Lansdown? In today's podcast: - Is this small cap the next Hargreaves Lansdown? - 3 reasons why the market did what it did today and - The micro and macro news - The hot and cold sectors - The biggest winners and losers and the FTSE 100, AIM 100 and the FTSE All Share. To listen to the podcast just click the link below (or copy and paste it into your browser): http://bit.ly/ADVFNPODCAST0016 If you'd like to suggest a stock for Friday's podcast just click the link below: http://bit.ly/SuggestAStock (All it involves is filling out a form that will take you around 5 minutes and you don't personally appear on the podcast). You can subscribe to this podcast in iTunes by clicking HERE To follow me on Twitter click HERE Justin    

[mayzerg] 03/9/2014 16:38

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 12:09

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

[broadwood] 03/9/2014 08:35

Yes, just noticed that. Temporary dip I think.

[allch2] 03/9/2014 08:33

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

[ceteri] 03/9/2014 08:09

why the drop in share price on what appear to be good results?

[mayzerg] 03/9/2014 07:16

These are solid results, just a shame I was stupid enough to purchase shares in the 40 PE range, would have got double the income! Sitting at a paper loss and will likely stay that way for another 2-3 years until the EPS catches up.

[broadwood] 03/9/2014 06:37

Hargreaves Lansdown hikes divi after unveiling record results - Hargreaves Lansdown's revenue, profits, assets under administration and active client numbers rose to new record levels in the year to the end of June. Total assets under administration increased by 29% to £46.9bn; net revenue rose by 8% to £291.9m and operating profit was up 8% at £208.0m. Total clients increased by 144,000 to 652,000 since June 2013 and the dividend of 32.0p per share is up 8%. Chief executive Ian Gorham said: "During the year we have continued to expand and improve the services we provide to our clients whilst also dealing with major regulatory change. Hargreaves Lansdown has not only retained but furthered its market leading position. "Our clients have entrusted a further £6.4 billion to us such that we now administer £46.9bn of assets. We have also welcomed 144,000 new clients during the year, with clients now totalling 652,000. This has led to an 8% increase in net revenues and 7% growth in profits - h

[leeson31] 03/9/2014 06:36

sweet enough: :) Year to Year to Change % 30 June 2014 30 June 2013 Net Revenue GBP291.9m GBP269.2m +8% Profit before tax GBP209.8m GBP195.2m +7% Operating profit margin (on net revenue) 71.3% 71.5% -0.2pts Total assets under administration GBP46.9bn GBP36.4bn +29% Diluted earnings per share 34.2p 31.4p +9% Net business inflows GBP6.4bn GBP5.1bn +25%

[broadwood] 03/9/2014 06:10

Solid. : Hargreaves Lansdown unveils record results

[leeson31] 02/9/2014 08:12

Final Results tmrw...