"Jupiter Fund Management (LSE: JUP) also issued a trading update after a strong year of 36% share price growth as stock markets boomed. However, the market is not quite so sanguine about todays results, with the stock dipping 2.12% at time of writing following a slowdown in net fund inflows to £600m.
Across 2017, total inflows were a buoyant £5.5bn, which compares favourably to just £1bn across 2016. Assets under management also increased, rising 24% over the year to £50.2bn. CEO Maarten Slendebroek hailed a year of consistent progress as strong investment performance provided positive returns for clients after fees.
Slendebroek said the £2.63bn groups diversification strategy is paying off as it launches a number of new funds targeting emerging and frontier markets. Jupiter also expanded its geographic reach with flows from clients in Thailand and Latin America. Its timing was good and last year was certainly the right one to target emerging markets. The top performing global asset class returned 25%, figures from Fidelity show. The FTSE 100 also had a strong year.
I am wary about tipping a fund manager with global stock markets at record highs and people once again worrying about a correction. However, Jupiters forecast valuation of 16.7 times earnings does not look pricey, and EPS are forecast to have grown a healthy 18% in 2017, with another 9% expected in 2018. By then, the yield is forecast to be 5.1%. Jupiter could be an even hotter destination if the market dips."
If you look under the news tab there is an update and a downgrade by a broker from add to hold. JUP has done well over the last year and maybe some think it will take a breather. I rate it as a WEAK BUY.
It's been down every day this week.
I sold my remaining holding this morning having done well with JUP since Brexit. Part of my current plan to hold more cash to invest when the market 'corrects'. Might then consider to get back in to JUP
Good luck to all.
Looking back at the broker price predictions a year back, they were all pretty much off target. This has proved to bevan excellent investment for me. I see no reason why there should not be more progress as Jupiter offers plenty of funds in which we can shelter our money safely away from the worst that Brexit might bring.
Liberum is backing Jupiter (JUP) as one of its favoured plays in asset management due to optimism on fund inflows. Analyst Justin Bates retained his buy recommendation and increased the target price from 487p to 591p. The shares were trading up 1.2%, or 6.5p, at 530p at the time of writing.
Bates noted the strong brand, expanded distribution and deepened product range, as well as improving fund performance as reasons to like Jupiter. A dividend per share yield of 5-6% per annum is also attractive, he said.
Jupiter remains one of our favoured plays in the asset and wealth management sector. We have raised forecasts by 3% in current year 2017 and 5% per annum in current year 2018 and current year 2019, principally due to a more optimistic view on net inflows, aided by strong markets.
The uncertainty provoked by last year's referendum highlighted the benefits of Jupiter Fund Management
's (JUP) efforts to diversify by geography and asset type during recent years. While some of its peers, such as Henderson(HGG), suffered net outflows last year, Jupiter managed a very respectable £1bn in net new business. However, the best indication that Jupiter is in robust form post-referendum came when it released its trading figures for the first three months of this year. This update showed net inflows of £1.3bn - the highest level of net new business gained by the asset manager since its IPO in 2010. This was also ahead of some analysts' expectations, leading to upgrades to expected inflows and earnings for 2017.
This strong performance indicates that management efforts to diversify the business by asset mix, client type and geography seem to be paying off. During the past seven years, Jupiter has been reducing its exposure to equities, varying the geography of its invested assets and growing its exposure to non-UK clients. At the end of 2011, 80 per cent of the fund manager's assets were invested in equities. Yet by the end of 2016 this had fallen to a little over half, with the remainder split between fixed income and multi-asset investments. Investment returns, along with currency effects, were £1.7bn during the first three months of the year. Management reported particularly strong inflows into its fixed income, absolute return, multi-asset and global emerging market strategies.
The fund manager also opened offices in Spain and Italy at the end of last year and reported positive contributions during the first three months of this year. The group now has offices in 19 countries. Management also reported particularly strong inflows in Asia and continental Europe. This builds on last year when the majority of net inflows came from its growing network of overseas offices. It is also broadening its product range in countries where it has an established presence. Admittedly, UK business still makes up a significant proportion of its overall client base - 78 per cent by the end of December. However, this compares with 90 per cent at the same time in 2011.
Jupiter still has a high exposure to the retail market, with 87 per cent of its assets in mutual funds at the end of March. This means not only that flows can be more volatile, but management fees could come under pressure if fund distribution platforms continue to consolidate and starts to exert more pricing power. The fund manager is also less exposed to performance fees, which means it is less able to reap the gains of strong periods of active performance. Jupiter's cash profit margin remained strong at 49 per cent at the end of December 2016. However, this was down from 51 per cent in the previous year, following the introduction of an aggregate operating fee for its SICAV funds.
Jupiter continues to maintain a strong balance sheet. At the end of last year, it had net cash of £259m. This backs up its generous dividend policy of paying out a base dividend of half its earnings, plus returning any further cash it does not feel it needs. This meant special dividends in 2014, 2015 and 2016 (see table). Analysts at Numis are forecasting further special payments this year and next.
Jupiter offers exposure to the structural long-term growth of the defined-contribution pensions market, following the introduction of auto-enrolment and growing contributions. Meanwhile, investors can get hold of a potential dividend yield of more than 6 per cent. Despite this, the shares trade at 14 times forward earnings for 2017, falling to 13 times in 2018. We think this relatively low multiple is not justified by the growth and income potential of Jupiter. Buy.
The 2016 performance overall looks good enough - the concern is the net out flow of funds in the final quarter and are they still flowing out? The Times Tempus suggested avoiding the shares as there may be more bad news to come; last year he recommended them as a buy.
A fall of around 10% since their Trading Update on 12 January seems a bit over-done.
Of course, the inevitable varied opinions from soothsayers (aka brokers) picking over the entrails and making their forecasts doesnt help either. What do they know when they cant even agree amongst themselves:
Exane BNP Paribas underperform, target 415p
Numis add, target 533p
Cantor Fitzgerald hold, target 470p
To my mind, this represents an ideal buying opportunity - based on the details published in JUPs Trading Update. Do others have an alternative view?
The run-up to the EU referendum in June caused retail investor caution, hurting inflows for many asset managers during the first half of the year. Like its peers, Jupiter Fund Management
(JUP) suffered a heavy fall in its share price as a result. However, unlike the vast majority of its peers, Jupiter continued to generate net inflows during this time. And in the three months following the referendum, inflows picked up further to £0.8bn, which was more than double that achieved during the entire first half of 2016. Analysts, many of whom had originally expected post-referendum outflows, have subsequently upgraded earnings forecasts for this year, as well as for 2017 and 2018.
We feel the strong post-referendum performance gives added credence to Jupiter's strategy of diversifying its business by geography, client type and asset class since it listed in 2010. But we don't think the shares' huge yield and modest earnings multiple reflects the progress being made or the long-term growth opportunities that should result from the government and companies passing responsibility for pension savings to individuals.
During the past five years, Jupiter has been decreasing its exposure to equities, varying the geography of its invested assets and growing the proportion of non-UK clients it has. At the end of June 2011, 82 per cent of the fund manager's assets were invested in equities. At the same time this year, equities made up little more than half of the group's assets, with the balance split fairly equally between fixed income and multi-asset investments. This variation contributed to Jupiter generating investment gains of £0.7bn during the first half, and investment returns rocketing to £2.5bn during the third quarter.
Jupiter is also diversifying its client base. Admittedly, 79 per cent of its clients are UK-based, but this is down from 89 per cent five years ago. During the first half the strongest contribution to assets under management came via its fixed income and European products, while the majority of net flows came from its growing network of overseas offices. Once the fund manager expands into Spain and Italy it will have operations in 19 countries, and it is broadening its product mix in regions where it already has a strong foothold.
However, Jupiter still has significant exposure towards the UK retail market with 87 per cent of assets in mutual funds. This makes it more susceptible to management fee pressure, compared with rivals with large institutional mandates, if the platform market consolidates and starts to exert more pricing power. The fund manager is also less exposed to performance fees, which means it is less able to reap the gains of strong periods of active performance. Nevertheless, Jupiter's cash profit margin remains high at 50 per cent.
The business is also highly cash generative, with more than £200m in net cash on its books. This backs up a generous dividend policy based on paying out a base dividend of half earnings and returning a further 40-or-so per cent by other means. This has meant special dividends in 2014 and 2015 of 11.5p and 10.9p (included in the figures in our table) and another special dividend is planned this year.
Not only do Jupiter's shares offer hugely attractive forecast income, but they are trading at just 13.6 times next-12-months consensus forecast earnings. This is inexpensive compared with peers Henderson at 14.5 times and Schroders at 15.6 times, both of which, unlike Jupiter, experienced retail outflows in the first half of 2016. The increasing diversity of Jupiter's business and long-term potential from changes in the pension market add further reasons to buy.
As i was looking for companies with dividend yield north of 6% with a well cushioned payout ratio, here 46% http://bit.ly/266XhG8
came across this asset management company; however, not sure that the recent dividend growth was due to a one off event or a strong performance reward which can be a recurring thing
Started adding JUP today at 424.89. I like the shape of the business but I think it's now oversold in current China concerns. Not looking for a rapid recovery, I invest on the basis that intrinsic value will shine through - eventually.
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