Record Share Discussion Threads

[masurenguy] 23/11/2018 08:15

Enterprise value of circa 5.4 and yield of 7.3%

[podgyted] 23/11/2018 08:10

First performance fee.

Analysts predicting profit fall - result 5% rise.

This has possibilities.

[s_a_b] 23/11/2018 07:47

All looks solid enough based on a first run through the half year results.

[welsheagle] 06/11/2018 15:37

Good write up in Investor's Chronicle this week.

[robsy2] 31/10/2018 12:01

i’ll go along with what he says . I have bought a few more this morning. 90 day reporting is all a bit blow by blow . They lose a few mandates and the share price goes off 25%. Seen it before and have bought on weakness and it has worked well ( to date).i use rec as the high yield bank account, keep a core holding and buy on weakness, selling back down if it gets to 45 p ish.
That’s the plan anyway!
Best
R2

[podgyted] 29/10/2018 19:43

ST in IC tipped again today. Conclusion:-

"On this basis, expect full-year EPS of 2.6p, implying the shares are rated on a PE ratio of 11.5. However, Record also has cash and money market deposits of £22.6m on its balance sheet, a sum worth 11.3p a share, of which only £9.1m is held for regulatory capital. What this means is that the directors are able to pay out almost all net profits as dividends given the healthy capital position. Mr Maile at Cenkos believes 100 per cent of EPS will be paid out as a dividend in the 12 months to the end of March 2019, implying the prospective dividend yield is 8.6 per cent. Trading on a cash-adjusted PE ratio of seven, the sell-off in Record’s shares is massively overdone. Buy."

[horndean eagle] 21/10/2018 20:01

ive held REC in the past and see its not really gone anywhere over the years. The currency trading product at one point had a decent track record but its been rubbish for years so its just had to make do from its passive hedging product. Its a much of a muchness on that front and there was always pressure on fees or clients moving. Dont think a lot has changed.

[frazboy] 19/10/2018 15:53

Yes, he's got it about right. Half the market cap is covered by liquid assets on the balance sheet. Downside from here looks limited but no rush to buy in either

[masurenguy] 19/10/2018 15:01

I used to be invested here but exited 6 years ago. Revisiting as a potential yield investment for my equity ISA. Will monitor for awhile before deciding whether to re-invest.

Graham Neary's view: This is a specialist fund manager providing currency services. I own shares in it because of my positive impression of management (conservative and well-aligned), excellent cash generation characteristics, and my belief, at the time I invested at least, that it served an important financial niche. Unfortunately, it hasn't achieved much in terms of growth in the last few years - but then, this has been reflected in the valuation.

Its share price has also been a victim of the recent general market correction, and then when you add in the effect of today's trading update, it's dropping deeper into what I hope will eventually prove to be "cheap" territory. When it comes to valuation, we should bear in mind that the company had equity (as or March 2018) of £26.5m, almost entirely tangible and liquid, including cash and money market instruments worth £22.5m. The Stocko valuation chart shows what I'm talking about: forecast dividend yield of 7% and EV/EBITDA ratio of 6.4x (prior to today's sell-off, so it's cheaper now).

Today's update is not too encouraging, sadly. Assets under Management Equivalent (AUME) are up by 1.1% when expressed in GBP, but this was driven by market movements, not by client inflows. There was a small client outflow during the period. Additionally, 7 clients (out of 66) are leaving, taking $2.5 billion of AUME with them (out of $61.8 billion). They use the Passive Hedging product, which is the cheapest one, so the total loss in terms of fees will probably not be huge. But it's hardly good news. "Fee rates for most products were broadly unchanged". Again, this doesn't sound great. The overall trend in fees appears to be negative. No performance fees were earned during the period.

My view - Unfortunately, Record's Passive Hedging product doesn't seem to stand out in the crowd (and charges low fees), while the Dynamic Hedging product, with higher fees, is a very small percentage of overall AUME and is in a negative long-term trend. That said, due to my sluggish investment style, I have no immediate plans to sell my position. On the bright side, I think it has the potential to recover some positive momentum in a period of extreme FX volatility, when institutions might be desperate for currency advice and might be willing to try the Dynamic Hedging product again, and I see the balance sheet and management as factors which reduce the risk of staying invested.

[frazboy] 19/10/2018 09:14

Having looked at the previous results and in particular the buyback programme you do have to wonder how well timed that was - they bought back £10m worth at an average of 50p? So that’s £4m of shareholders equity down the drain. The loss in client numbers (to come) only takes them back to where they were 12 months ago or so - not a cause for huge concern but the market is pricing that in as a trend

[frazboy] 19/10/2018 08:54

Margin pressure and the lost of 7 clients with $2.5bn under management in the next quarter is the only bit the market read

I wonder if there will be a special dividend for this half?

[mister md] 19/10/2018 08:50

a reasonabe trading update and yet the shareprice continues to decline ?

[jbarcroftr] 15/10/2018 13:54

Looking very cheap.Anyone know why the recent fall

[robsy2] 12/9/2018 17:10

I think this is a genuine purchase rather than an award.
R2

[trident5] 11/9/2018 12:47

Isn't director buying built into their reward package - i.e. not really a signal.

[robsy2] 11/9/2018 12:21

Sp moving up. A Director has bought a few.
Good divi returns. Defensive stock. Can see this going higher.
R2

[its the oxman] 15/6/2018 11:11

Price firming up, results meeting can't of gone too badly, might move slightly higher in days ahead I suspect.

[its the oxman] 15/6/2018 08:07

Results look ok at first glance, will be interesting to see how forecasts move from here. Nice div.

[jimmywilson612] 23/4/2018 11:25

Welcome to the gang Nimrod.

My purchase on the 16th could have been better timed! Hopefully shouldn't matter over the long term but we shall see.

[nimrod22] 20/4/2018 08:56

Bought 10 grands worth at 43.7521p this morning, probably worth a punt on the sudden drop.

[mrthomas] 13/3/2018 09:26

sold did well may have sold too soon but did well in five months with div and gain

[glawsiain] 02/2/2018 11:12

Tipped by Simon Thompson in his 2018 bargain shares:



"Record retains £26.6m of net cash on its balance sheet, a sum worth 13p a share, albeit £8.9m of its cash is required for regulatory capital. As a result of its balance sheet strength, the board is able to return all of its net profits to shareholders, which is why analysts at Edison Investment Research predict a total payout of 3.1p a share for the 12 months to end March 2018, up from 2.9p in the 2017 financial year. This implies the shares offer an attractive prospective dividend yield of 7.1 per cent, and are rated on a modest cash-adjusted PE ratio of 10. Importantly, there is potential for upside to Record’s profits in the 2018-19 financial year given the likelihood of increased volatility in currency markets linked to both political and economic events."

[boadicea] 28/11/2017 22:23

Edison review of REC here -


One may need to register but it's free.

[trident5] 17/11/2017 10:57

Their continuous inability to win new mandates is quite shocking - marketing/sales team need a major shake up

[walbrock82] 17/11/2017 10:30

Here is my interpretation of Record results:

Asset under management increasing to $61.2bn is another record high, as Record (no pun intended) continues their recovery for the fifth year in a row. However, 85% of this fund is allocated to “Passive Hedging”, a product that earns Record the lowest amounts, in terms of basis points. That is 3 basis points or 0.03% of allocation fund size., down from 4 basis points. This compares to their dynamic hedging (14 basis points), Multi-product (18 basis points) and Currency for Return (17 basis points).
All these other products earn 4 times more than passive hedging. But, their fund sizes compared to passive is 20 times smaller!
Which is why passive hedging has contributed 53% of the management fee.

For further interpretation and a historical perspective of Record, click