Daily Grime -STJ/NSF

Jeremy Grime | Oct 22, 2019 13:04

Chart of the week

I know this chart is for the US but I suspect the same applies in the UK. It helps explain why we all feel a little grumpy

Non-Standard Finance (LON:NSF) – Director Change

Share Price 38p

Mkt Cap £117m

Conflict Disclosure: No Holding

Change: Miles Cresswell Turner is stepping down from NSF. He was instrumental in building the portfolio and served an CEO pf the branch based lending business.
Valuation The shares trade on a PER of 10X and yield 7.7%. Provident Financial (LON:PFG) trades on 9X and yields 6.1%
Implications This underlines the risks of a team incentivised by founder shares which expire in January next year. The shares have a vesting threshold of 105p while the share price is 38p which suggests that investors may want to exercise caution ahead of the incentives going forward being clarified. Provident on the other hand is now looking interesting.
St. James’s Place PLC (LON:SJP)– Q3 Update

Share Price 1013p

Mkt cap £5,407m

Conflict Disclosure: No Holding

Update Net inflows were 1.9% over the quarter which brings AUM to £112.8bn. Pensions are the driver of net inflows. NAV on an EEV basis is £12.60 per share at 30 September.
Estimates AUM is now up 18% over the 9 months to September and forecasts anticipate £267m of pre tax profit.
Valuation EEV has been discredited for many insurers. The shares trade at a premium of 530% to NAV. In PE terms that is 24X and the yield is 4.8%.
Conclusion The Yodelar report was scathing over St James’ performance. Not to mention the Woodford publicity. Then we have the high and complex charges. It is hard to see what will stop the net inflows if this doesn’t when the industry is under pressure on flows. It does show the power of marketing in financial services. It still has momentum. But I think of it as unethical.

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Written By: Jeremy Grime

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