Premier Miton Share Discussion Threads

[riverman77] 05/9/2023 21:17

Yes I hold some CLDN so saw that. My understanding is 7IM are more of a wealth manager, and these seem to be in demand for their recurring revenues. There have been a few bids in this sector and they attract quite high multiples.

[bmcollins] 05/9/2023 17:28

@riverman
Did you see that Ontario teachers fund has just agreed to pay £255m for Caledonia's controlling stake in 7 investment management ?
They also made comments about assisting 7IM to continue to expand both organically & through M&A.
Oddly enough PMI are easier on the news...

[riverman77] 04/9/2023 13:18

Yes agree with that - PMI could make an attractive bid target for a larger asset manager. or even a merger with a similar sized one. The sector needs to consolidate and expect this to continue.

[bmcollins] 04/9/2023 13:09

@dexdringle
I agree with you re the possibility of a bid for this asset manager, I had posted that earlier and see no real reason why PMI would not be attractive to a larger fund manager, indeed just like Miton when it was bought by Premier some years ago, similar circumstances.

[dexdringle] 04/9/2023 12:43

Good point re the intangibles.

Re AUM and adding £10 billion at zero net cost I meant someone else could by buying PMI for £1 a share. Although that ignored the intangibles.

[riverman77] 04/9/2023 11:06

Not done maths myself, but I had a look at some old broker notes and you can also see historic broker forecasts on Stockopedia. The 15p EPS that was pencilled in before looked very reasonable based on the AUM at that time. Fund managers have a lot of fixed costs and operationally geared, so changes in AUM can have big impact on earnings.

"They can add £10 billion to AUM at zero net cost" - easier said than done. How are they going to attract £10bn AUM in a weak market, with investors pulling out of funds and PMI fund performance mixed at best?

On the book value point - I'd watch this as most of this is intangibles. PMI is currently about 3.8x tangible book value (BV not really a key metric to value fund managers anyway, although if I were to look at this I would refer to tangible book value and ignore any intangibles).

[dexdringle] 04/9/2023 09:13

riverman77 4 Sep '23 - 09:37 - 202 of 204

Because a couple of years ago they were forecast to deliver EPS of around 15p. 

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On what maths was 15p EPS expectation based ?

[dexdringle] 04/9/2023 09:10

Premier Miton has a market value circa £110 million. It has £50 million cash and a net book value of £120 million so trades at NAV (or thereabouts). It has AUM of around £10 billion.

Surely this is a takeover target for a consolidator at this share price ? They can add £10 billion to AUM at zero net cost.

I don't see Premier Miton as a growth stock. More bread and butter, old tech, fund manager surely ?

[dr biotech] 04/9/2023 09:04

There has been a big derating of growth stocks over the last 2 years or so. So companies showing decent growth may have averaged a PE of 20+ and now they are down to 12 or less. Just see how much the supposed smaller companies indices have fallen (AIM is down about 40%). The cost of debt is putting the brakes on growth, and as pointed out above if you can get 6% risk free why invest in equities.

I feel the Fund managers are in a decline for a multitude of reasons. The public is much more aware that they rarely outperform trackers over a long period - and the high profile debacle over woodford wouldn't have helped. On a personal note, I switched out of HL because of the high fees, and I now have as much in trackers as I do in trusts because of performance. I guess I am more informed than the average punter as most of us probably are just by being on these forums. However there are still plenty of gullible punters out there - St James Place are doing OK despite their units poor performance and eyewatering fee structure.

I don't hold here, just a casual observer after the telegraph tipped it as being their share of the year. I do hold M&G and Aviva though.

[riverman77] 04/9/2023 08:37

Because a couple of years ago they were forecast to deliver EPS of around 15p. 200p didn't look outrageous under these circumstances. Since then we've seen a sharp fall in AUM due to falling markets and outflows - now forecast to do around 7p. As I mentioned before this is a leveraged play on equity markets.

[dexdringle] 04/9/2023 08:26

Just 18 months ago these were £2 a share. Now sub 80p.

On what fundamentals were people paying £2 a share ? What were they expecting that made £2 a share at that point seem like good value ?

[spectoacc] 03/9/2023 17:44

Wasn't a problem when money was pouring into investment; is a problem now, and going forward, when you can get eg 5% tax-free in Gilts, or 6.2% for a year in NS&I, and when cost of living means there's less money to go round/higher mortgage payments anyway.

[riverman77] 03/9/2023 15:46

Agree, there are way too many near identical funds out there - well over a hundred UK equity income funds just for starters and very difficult to see how they differ. Room for a lot more consolidation in the space.

[riverman77] 02/9/2023 15:39

No mystery for the fall. PMI are essentially a leveraged play on UK equities and 2 years ago UK equities were doing very well. All downhill since, hence the fall from £2 to current price.

[holts] 02/9/2023 14:22

No doubt they are still paying themselves well ,are the fees excessive here ?

[dexdringle] 15/8/2023 13:51

How on earth did these hit £2 a share just 2 years ago ?

Was something amazing expected to happen that didn't happen ?

[eigthwonder] 15/8/2023 12:40

Dividend “policy” is a total mess. When a board can endorse that degree of idiocy on the dividend it makes you wonder what other dim-witted decisions are being made by them.

[masurenguy] 14/8/2023 19:39

Interim was cut by 19% to 3p and last years final was 6.3p. If they apply the same reduction to the final then it will probably be 5.0p making a total of 8p v 10p last year.

[bmcollins] 14/8/2023 19:09

No, the latest one has been cut which implies that the final is also likely to be cut too

[timmy40] 14/8/2023 17:13

Is the dividend yield correct at 12% ?

[bmcollins] 19/7/2023 10:17

Oxman
Agreed
They must be on the M&A radar by now although as the management hold a significant amount they must want the share price up like we do.

[its the oxman] 19/7/2023 09:47

Added a few 72p. Well oversold here.

[masurenguy] 19/7/2023 06:14

Premier Miton: Peel Hunt optimistic on long-term

Premier Miton (PMI) has had a tough quarter, but longer-term the performance is holding up, says Peel Hunt. Analyst Robert Sage retained his ‘add’ recommendation and increased the target price from 85p to 100p on the Citywire Elite Companies plus-rated stock, which fell 3.7%, or 2.7p, to 72p on Tuesday. Assets under management fell 4.7% in the second quarter of this year to £10.5bn, which was below market expectations. ‘Outflows rose to £449m, a record 4.1% of opening assets under management,’ said Sage. ‘We expect them to reduce in coming periods, but the outlook remains challenging.’ However, he added that all asset managers in his coverage universe reported negative flows, but with Premier Miton ‘the case for M&A is strengthening’. ‘Premier Miton had a poor [quarter], impacted by its overweight exposure to UK investors and markets,’ said Sage. ‘The 12-month performance is relatively stronger and valuation and industry pressures may generate inorganic opportunities.’ Citywire

[bmcollins] 18/7/2023 12:05

CWA1
Thanks for that, I guessed something had to be out.
Rightly or wrongly I have added to mine down here, it seems a compelling price to me as they have to be a takeover target at these levels although I see their fundamentals as pretty strong.