Hargreaves Lansdown Share Discussion Threads

[lomax99] 19/5/2022 18:23

It is on Citywire:Next month marks the third anniversary of the suspension of the Woodford Equity Income fund and 36 months since the Financial Conduct Authority launched an inquiry into the scandal affecting 300,000 investors. Star fund manager Nick Train wants to know what on earth the hold-up is, believing the uncertainty is weighing on the shares he holds in Hargreaves Lansdown.Speaking at the Frostrow investment companies conference in the City of London yesterday, Train, whose firm Lindsell Train is Hargreaves' second biggest shareholder with a 12.8% stake, called for those involved in the running and promotion of Neil Woodford's fund and business to be either 'sued or exonerated'.Train, who holds Hargreaves in his £1.8bn Finsbury Growth & Income (FGT) investment trust and £5.3bn Lindsell Train UK Equity fund, said there was 'no point in not being transparent and candid' about the poor performance of the shares.Despite operating the UK's largest retail investment platform, with £132bn of assets under administration and a leading share of the growing market in DIY investing and shares in the FTSE 100, the Bristol-based broker has lost 64% in three years. By contrast the UK stock market is up 13%.Hargreaves played a leading role in supporting Woodford (pictured above) when the former star equity income fund manager left Invesco to set up his own business. It invested heavily in the Equity Income fund through its own multi-manager funds and included it in its Wealth 50 recommendations list right up until the fund's suspension in June 2019.Train (above), who also runs the £6.9bn Lindsell Train Global Equity fund, said the involvement had hung over the investment platform, noting that the FCA had failed to draw any conclusions or pin any blame despite an ongoing report into the scandal.'It is three years almost to the month since the suspension of the Woodford fund and we have not been offered any report on the circumstances,' said Train.'People who participated in that – to a greater or lesser extent – need to be sued or exonerated. I can see why people are waiting for that.'Hargreaves not AmazonTrain also noted that heavy selling of Hargreaves shares by founders Peter Hargreaves and Stephen Lansdown had held back the stock. The former sold £300m of shares in February 2021, just a year after offloading £550m of stock, while the latter sold more than £250m of shares post-lockdown.Train said the selling was 'not helpful' to the share price.He also criticised the company for failing to invest more in the platform business until this year, choosing instead to reward shareholders with special dividends.'We are forever badgering Hargreaves to stop paying so much in special dividends and invest more in functionality and opportunities that present themselves to the biggest investment platform in the UK,' he said.'There is evidently major opportunities to expand the business... but they need to spend to do it,' Train said.However, the fund manager noted Hargreaves was not given credit when it did invest. In February, the shares tumbled more than 15% when it canned its accustomed additional dividend to plough £175m into a new five-year digital and advice strategy.Train said if Amazon had announced a similar investment strategy 'then the shares would have been up 15% because investors would have rewarded the entrepreneurial spirit.' The Hargreaves investment was 'not afforded any value' because of the previous focus on the special dividend, he said.Last December FCA chief executive Nikhil Rathi (above) told MPs on the Treasury Select Committee that all key evidence had been gathered in the Woodford inquiry and he expected all investigation work to be complete by the end of the year. However, he cautioned that the evidence would be subject to legal review that could necessitate 'the need for further focused evidence acquisition'. Broker's cash pileMeanwhile, Hargreaves Lansdown has accumulated a cash pile of £433m at the end of last year, which could be useful if it receives a fine in this high-profile case, although the execution-only broker will doubtless argue it never advised investors to buy Woodford's fund.Aside from the regulatory uncertainty, Hargreaves' sliding share price decline mystifies Train. While it has faced growing competitive pressure, the broker has, as the manager highlighted in Finsbury Growth's results this week, proved remarkably profitable, generating an impressive 50% return on equity, the best in his portfolio. From its May 2019 peak of £24.19 the stock has tumbled £15.58 to 861p, down a further 3.2% today, and no longer features as a top-10 holding in Train's trust or funds.Hargreaves' poor share performance sums up a torrid 18 months for Train who, having outperformed the FTSE All-Share for up to 18 years, has fallen way behind the index as his quality growth style has fallen out of favour.Over three years, even with dividends included, Finsbury Growth shares have fallen 7%, compared to the 15% total average return of trusts in its AIC UK Equity Income sector. Nevertheless, he is confident his picks of financially strong global franchises such as Diageo, Burberry and Unilever will re-rate as markets again appreciate their reliability.

[growthpotential] 19/5/2022 18:09

Where did you see the item on HL?

[spectoacc] 19/5/2022 06:02

Interesting how many seem keen on ADM - as a DLG holder, I'm aware what the market's view of insurance is atm :)

HL - Nick Train was ramping it again the other day, talking about 50% margins and future growth. I'd like to see some signs of them sorting out the customer experience, rather than trying to ramp customers into their funds.

[jubberjim] 18/5/2022 16:53

Underwater on admiral (apt)

But I think not withstanding hoped for takeover this is headed even lower than my worst case scenario previously

This is due in no small part to the markets and the myriad small investors willing or able to deal in these uncertain times

Add to that the paucity of the service and the unwillingness of investors to meaningfully engage and take positions

Sell in may and go away seems to be a proven adage

If e spent my money (I never learn)

Enforced sitting on hands until there is a marked upturn for me

Good luck hoping tide turns soon

[giltedge1] 17/5/2022 08:11

Yes Agree nice fit for Banks, especially LLoyds, great cross selling opportunities.
Founder shareholders willing sellers at right price.

[growthpotential] 13/5/2022 19:34

Hideously undervalued is this stock. What would a take over offer be, would be happy with 1600 but I won't have gained much for the 3 years or so I've been in...

[robinnicolson] 13/5/2022 12:38

Tempus article in The Times today:

"...Hargreaves downward march naturally raises the potential for a takeover bid, particularly for banks looking for a less capital-intensive way to boost returns."

[giltedge1] 13/5/2022 12:25

congrats OCH & Porche1945 for well timed trade yesterday, a steal at low £ 8,
worth over £ 10 easily will be a major beneficiary for market bounce.
Interest on cash pile £ 13 Billion will be alone, I make it £ 50M extra next 12 months.

[ochs] 13/5/2022 07:19

Update from JP Morgan this morning - a bit like a back handed compliment, they say 'underweight' but have a price target of 1,060p!

[ochs] 13/5/2022 06:42

@jubberjim my memory of 2020 was a big shock in March, but then steady recovery for the rest of the year. The loss of dividends was really disappointing - especially from all the housebuilders.

ps. I like Admiral for my car insurance - been using them for a few years, and the yield looks attractive at current prices.

[spectoacc] 13/5/2022 05:52

You're worried about 2020? Worry about 2008, or 2000-2003. I'm positioned for a bounce but well aware everything can halve from here.

[ochs] 13/5/2022 05:18

What you need to remember is that HL has been around 40 years, is well established, profitable and generates bags of cash. Whereas Robinhood is a fly by night company which was hyped during the pandemic and hence became very overvalued, but they make very little profit if any. In other words the 2 businesses are very different, and don't really compare.

[jubberjim] 12/5/2022 23:05

well looking a bit better this evening

Positive news about RobinHood in the States might encourage further movement up

Still bit underwater with my Admiral purchase so will for now watch from sidelines until funds become available

Feeling happier now

hope I haven t spoken too soon

[ochs] 12/5/2022 20:42

@Porsche1945, thanks re: Upstart. I've jumped in with some Amazon recently as it looks historically low now, and AWS looks strong and keeps pumping in the money.

[growthpotential] 12/5/2022 12:58

Don't be too hard on yourself, plenty of investors in the red but if I like at my AUM (including house) I'm probably back to where I was mid 2020. That's not catestrophic all things considered and I find it really funny when they say markets are forward looking. Truth is they're only looking forward about another year or so. Serious upside when things time round, & they will eventually

[jubberjim] 12/5/2022 12:27

Not very encouraging numbers this morning

Am still holding back as not willing to make another expensive mistake

ADM have been disappointing for me to date and I believe with the present dearth of activity in the markets it does not spell good news for HL.

Will hang fire as now think possibility of heading lower in the absence of any significant upturn in trades

Would not like to put a bottom on it too many imponderables for my peace of mind

One of these days someone will be picking up a bargain but alas unless ADM does its stuff will not be this hopeful pessimistic investor

Good luck everyone

[giltedge1] 12/5/2022 09:36

Sold most last night luckily, still think good long term buy, & will add again, in due course worth over £ 10. Difficult market an understatement looking for steady eadies see mu ULVR, PRS posts

[ochs] 12/5/2022 09:36

Just been looking at a (very) long term chart and not really much support left (after 828p) apart from a low of 403p on 25 Aug 2011.

[ochs] 12/5/2022 09:00

Good summary @Porsche1945, you've been right on HL up to now. I bought more at 810p first thing. It should finish the day above the 828p support all being well :)

What's your current view on Upstart? I never bought in, but they've had a hefty drop this week after downgrading their numbers.

[porsche1945] 12/5/2022 08:54

Have finally bought in, bad news for these has pretty much flushed through i would think, most seems to be priced in, I dont see them ever getting back to 24 quid, but, I do think 15/16 is possible over an 18 month time frame, and there could be a hostile takeout offer at this price, its a lot of business for the money. I’m thinking majority owners will be putting pressure on, they want to exit, but not at this price. It’s a buy when theres blood on the streets stock at the moment but their numbers, i think, are ok, better than I thought they would be. I’d expect a bounce tomorrow or later today and then a slow grind upwards. The yield on them now pretty good, and when they go back to paying specials if you enter around this price your looking at 6 pc plus in a growth company.

[spectoacc] 12/5/2022 08:09

Whilst I don't disagree - the rot starting with the pathetic and endless ramping of Woodford - they're down c. 42% over the past 5 years.

Down c.8% in a week, -18% in a month, -42% in 3 months, -49% in 6 months etc etc, with the 3 year -c.68% particularly impressive.

Can fall forever of course - but at some point it's in the price.