NWL -4.15%: Reported net inflows for the fourth quarter of $3.8 bn, taking FY net Funds Under Administration (FUA) flows of +$11.2 bn, with FUA at period end of $88.0bn up from $70.27bn at the end of FY23. These are great numbers, however a few flags to highlight on NWL (and HUB for that matter). Because they run cap priced fees, more FUM does not necessarily mean more fees, it depends on how the new FUA is distribted at an account level. As FUM grows margins contract and when combiend with currently lower cash balances, which is a lucrative area for them (they apply a haircut on cash accounts), the valuations of the platform businesses seem at least ‘full’ to us. The market is also very optimistic on their earnings from a consensus perspective, so the bar is being set high.
- We’re not surprised to see some broker downgrades popping up for both HUB & NWL.
MM is neutral NWL ~$21
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