This UK-based asset manager has been on the back foot since delivering a disappointing quarterly update in May and as we said at the time when the stock was ~$38, we would want to see some clear operational improvements before going long as investors continue to be rewarded for selling rallies as opposed to buying dips. However, after yesterdays -5.7% fall we can see some light slowly appearing at the end of the tunnel:
- Fresh multi-year lows look almost inevitable in the coming weeks i.e. at least another -2.5% lower.
- However if we do see a panic spike down towards $30 we feel the risk/reward will start to favour the brave.
On Tuesday we said “MM believes it’s too early to wade into the fund managers space but there are certainly areas of interest” and after more than halving, JHG will look compelling trading on a forward multiple of 8x and a projected yield close to 7%.
MM thinks JHG is looking interesting in the $30- 32 area
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