PDL currently screens on the cheap side with an Est P/E for 2022 of 9.5x compared to its longer-run history of 13.9x, however, all fund managers have been sold off heavily in recent times and as we know a stock/sector can stay cheap for longer than many expect, and vice versa for that matter. The market consensus dividend yield of 10% is also attractive, although, PDL does have a high payout ratio which means that yield will fall if earnings come under any further pressure. The intrinsic value in the stock was confirmed by Perpetual (PPT) which bid for Pendal recently pushing the shares up to $5.50. That bid did not eventuate after Pendal rebuffed the advance – a common outcome in recent times.
For subscribers looking for some instant gratification, it might not be the optimum pick as we can see it hasn’t bounced that hard over recent sessions – more a deep value income play than a ‘growth’ investment in MM’s view.
MM likes PDL around $4.50 as an income opportunity
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