reports
- David Talpert
- Harry Botha
- Warwick Bam
Avior Financials | Coronation | Peregrine | Repo rate cut | Investment...
Coronation's Dec '19 institutional factsheets highlight impressive 2019 investment returns. We estimate Group Q1 FY ‘20f net outflows of R17.8bn and Dec '19 AUM to remain flat at R577bn. Peregrine's hedge funds generated strong returns in FY '19. We expect PGR to report improved performance fees in H2 ‘20f. > Due to heightened credit risk in the SA economy, SA Repo rate cuts are positive for SA banks' earnings growth prospects in our view (as lower impairment charges and higher advances g...
- David Talpert
- Harry Botha
Coronation | A slow improvement in net flows
Coronation Fund Managers (CML) reported an 18% decline in FY '19 headline earnings. Net outflows of R44bn is ahead of the five-year average of R38bn. We expect FY '20f earnings to recover (8.3% y/y growth) as net fee margins improve. We forecast AUM growth at a 3% CAGR over the next three years. In our view, the investment case depends on CML's ability to generate sufficient alpha to stem the outflows. We believe the outflows will continue unless there is consistent alpha generation or net ...
- David Talpert
- Harry Botha
Peregrine | A buyout or buyback
Peregrine Holdings (PGR) reported improved H1 '20 results as normalised HEPS increased by 15%. Citadel's 18% earnings growth offset disappointing results from Peregrine Capital and Stenham. We believe Citadel is a high-quality asset, which is not receiving a fair rating in the group structure as PGR trades at a discount to our SOTP fair value. We estimate a current fair value of R21.33/share. In our view, the market is applying a discount to PGR's NAV similar to other SA holding companies. ...
- David Talpert
- Harry Botha
Coronation | At the mercy of the markets
We expect Coronation Fund Managers (CML) to report a 22% decline in FY '19 HEPS. CML's AUM has remained flat over the past five years due to muted equity returns and over R180bn in cumulative net outflows. In H2 '19, we expect net outflows of R21bn. Due to CML's high market share, we believe there are limited growth opportunities in SA. We therefore expect CML's AUM to increase in line with market returns. Due to our expectation of continued net outflows, we estimate an AUM CAGR of 3% over ...
- David Talpert
Coronation | Not enough to turn the flows
Over the past four years, Coronation Fund Managers (CML) has experienced cumulative net outflows of R176bn. The outflows are due to a combination of industry outflows and disappointing fund performance. Based on the weak local economy and lacklustre investment performance, we do not expect CML to attract positive net flows over the next three years. We expect FY '19 earnings to decline by 22%. We estimate CML's Jun '19 AUM to decline by R7bn to R579bn. We expect H2 '19 net outflows of R17b...
- David Talpert
Peregrine | Setting up for a rebound
Peregrine reported a 7% decline in FY '19 ongoing normalised HEPS as performance fees declined by 65%. The current earnings represent a low base with 92% annuity earnings. We believe PGR's earnings will rebound by 18% in FY '20f due to higher performance fees and a weak ZAR. In our view, despite a 10.5% historic dividend yield, the market is not putting sufficient value on the cash generative nature of PGR's capital light operations. We believe the share will rerate as PGR delivers improved earn...
- David Talpert
Coronation | Fee compression
Coronation Fund Managers (CML) reported weak H1 '19 results as HEPS declined by 26%. A lower fee margin of 53bps (H1 '18: 61bps) resulted in a 22% decline in revenue. Weak investment performance in 2018 has resulted in fee discounts (negative performance fees). Despite improved returns in 2019 YTD, CML's recent underperformance will affect FY '19 margins. We believe CML requires consistent outperformance to stem the outflows and improve margins.
- David Talpert
- Harry Botha
Peregrine | Slow and steady
Peregrine Holdings (PGR) has successfully transformed into a capital light wealth and asset manager. PGR has an offshore bias and benefits from a weak ZAR. We expect PGR to report reduced performance fees in FY ‘19. However, FY '19 earnings should represent a low base, we expect double-digit earnings growth in FY ‘20 as positive market returns and performance fees support earnings growth. We believe an improving outlook for earnings growth will support a rerating.
- David Talpert
Coronation | Rediscovering alpha
Coronation Fund Managers (CML) had impressive Q1 CY '19 investment performance as most mandates outperformed their benchmarks. Improved investment performance supports a slowdown in net outflows and our fair value for the Group. We estimate AUM at Mar '19 of R589bn (+7.1% from Dec ‘18), based on quarterly net outflows of R5.7bn and investment returns of 8.2% (JSE SWIX +6%). However, we expect H1 FY ‘19 average AUM of R578bn to be 1.8% lower than closing AUM.
- David Talpert
- Harry Botha
Peregrine | More predictable
Peregrine Holdings' (PGR) H1 ‘19 results were probably the last set of numbers affected by the restructuring transactions over the last two years. The Group now has a capital light business and targets a dividend payout ratio of 80% to 90%. We expect the changes to support the share's rating. We expect performance fees to improve over the next three years. However, we do not expect PGR to consistently produce double-digit earnings growth. Therefore, while we believe the Group is underval...
- David Talpert
- Harry Botha
Coronation | Priced for outflows
Coronation Fund Managers' (CML) FY ‘18 result was in line with our expectation as earnings decreased by 3.8% to 420.7cps. Average AUM was 3.1% higher YoY. However, revenue declined by 1.8% due to lower performance fees and fee discounts. CML reported net outflows of R31bn. We expect further outflows as CML's funds have underperformed their benchmarks. Despite the outflows, we expect market returns to support AUM. We therefore expect muted earnings growth for the next two years. However, we bel...
- David Talpert
- Harry Botha
Peregrine | H1 '19 earnings preview
Peregrine Holdings (PGR) will report H1 '19 results on 21 Nov '18. We expect the weak ZAR to support earnings. However, we expect lower performance fees from hedge funds. We expect H1 '19 earnings (excluding Securities) to decrease by 2.4% YoY to 76cps (1.6% increase to 98cps including Securities). We expect a c.8.7% dividend yield and a share buyback equivalent to 7.5% of PGR's market cap to support the share price.
1 director sold
A director at Coronation Fund Managers Limited sold 101,110 shares at 57.000ZAR and the significance rating of the trade was 77/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last...
- David Talpert
- Harry Botha
Coronation | Supported by the Rand
Coronation Fund Managers (CML) had an improved quarter to 30 Jun '18. A 2.1% JSE SWIX return and the 16% weaker ZAR relative to the USD supported AUM growth. We estimate Q3 '18 AUM of R602bn (H1 '18 AUM: R588bn). CML's share price has declined following disappointing H1 '18 results. We believe CML will have a challenging H2 '18 due to net outflows and lower performance fees. However, CML's share price adequately compensates investors for these risks.
1 director bought
A director at Peregrine Holdings Limited bought 30,000 shares at 21.162ZAR and the significance rating of the trade was 54/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two ...
Ford Equity International Rating and Forecast Report
Ford Equity International Research Reports cover 60 countries with over 30,000 stocks traded on international exchanges. A proprietary quantitative system compares each company to its peers on proven measures of business value, growth characteristics, and investor behavior. Ford's three recommendation ratings buy, hold and sell, represent each stock’s return potential relative to its own country market.. The rating reports which are generated each week, include the fundamental details behind...
Ford Equity International Rating and Forecast Report
Ford Equity International Research Reports cover 60 countries with over 30,000 stocks traded on international exchanges. A proprietary quantitative system compares each company to its peers on proven measures of business value, growth characteristics, and investor behavior. Ford's three recommendation ratings buy, hold and sell, represent each stock’s return potential relative to its own country market.. The rating reports which are generated each week, include the fundamental details behind...
Coronation Fund Managers: EPS down 13% - valuation remains full
​EPS down 13% - valuation remains full..​FY 16A results of ZAR 1,572m came in 5% below our original estimates, down -13.1% y/y on lower performance fees (66bps of AuMs), with OpEx a bit less flexible than expected (only down - 3.0% y/y), at the higher end of the IMS range (10-20% fall in EPS).Key positives remain: high FCF yield with all earnings being paid out.
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