Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Hi James, GQG FUM 167.2 billion and Paid 7.7 cents dividend in the last 2 quarters, base on last year dividend 15.5 cents and current share price of $1.44 is equivalent to roughly 10.8% yield. why is GQG such a laggard after recent second quarter results? PPT has got potential offered for wealth management business, why is the market ignore this news ? Thanks James for your insight .
Hi John,
Two asset managers who have struggled for the last 12-months and in the case of PPT its been to closer to 4-years. The important point is to look ahead, not at the present as these businesses have a lot of overlap plus some subtle differences:
GQG Partners Inc (GQG): GQG earns management fees and performance fees on the funds it manages. The problem is GQG has experienced redemptions as its underperformed high flying indices due to a recent more conservative stance – time will tell whether there caution proves correct. Poor performance generally leads to outflows, outflows = lower earnings and dividends, which is what the market is preemptively pricing.
We bought the stock for yield and growth and it looks a bargain below $1.50 but if redemptions gather momentum the dividend will follow suit – aka Magellan. Obviously not our preferred scenario but we will be watching funds flows carefully.
Perpetual Ltd (PPT): We discussed PPT in length last month and goalposts haven’t moved. We believe there is more value inside PPT than today’s price implies and while the ATO put the kibosh on KKRs takeover, it doesn’t mean they or other suitors aren’t still lurking. Management are looking to simplify the business by divesting Wealth Management and focusing on Trust and Global Funds Management but it may take time for the stock to turn as it continue to suffer outflows. Regarding the wealth business, it’s not worth much, hence why the market is not that focused on it’s potential sale.
Take a free trial.
No payment details required.
Forgot password? Request a One Time Password or reset your password
One Time Password
Check your email for an email from [email protected]
Subject: Your OTP for Account Access
This email will have a code you can use as your One Time Password for instant access
A link to create a new password will be sent to the email address you have registered to your account.
Hi, this is only available to members. Join today and access the latest views on the latest developments from a professional money manager.
Our Smart Phone App will give you access to much of our content and notifications. Download for free today.
