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Recommendation: Buy |
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Note: Marker indicates price at previous close |
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INVESTMENT RATING (Last update: 27/07/2008)
AUW has small market shares across the wealth management value chain and is transforming itself by integrating Select Managed Funds. Some cost efficiencies and merger revenue synergies are still yet to come and further accretive acquisitions of superannuation funds are likely. The company benefits from favourable demographic trends and legislated superannuation contributions. Cash generation is high because little extra capital is required to grow earnings. AUW’s fund balances are predominantly retail and thus fairly sticky. The main downside risks are sharemarket downturns and unfavourable regulatory changes.
|
Previous Close |
52 week High |
52 Week Low |
|
$1.460 |
$2.840 |
$1.110 |
| Sector |
Diversified Financials |
| Market Cap |
$900 Million |
|
|
Total Shareholder Return (avg annual rate) |
|
| 1yr |
3yr |
5yr |
10yr |
-41.8% |
12.1% |
-- |
-- |
|
|
Intrinsic Valuation |
|
$2.90 |
| Moat Rating |
None |
| Business Risk |
Medium |
| Pricing Risk |
Medium |
| Company Beta |
1.20 |
| Sector Beta |
1.41 |
|
|
Year |
6/06A |
6/07A |
6/08E |
6/09E |
|
| NPAT ($m) |
23.8 |
61.0 |
75.0 |
88.0 |
| EPS (c) |
8.3 |
10.8 |
13.0 |
15.2 |
| % Change |
-1.2 |
30.1 |
20.4 |
16.9 |
| DPS (c) |
8.0 |
9.5 |
11.5 |
13.0 |
| Franking (%) |
100.0 |
100.0 |
100.0 |
100.0 |
| Yield (%) |
4.3 |
3.8 |
7.9 |
8.9 |
| PER (x) |
17.6 |
13.5 |
11.2 |
9.6 |
Source: Aspect Huntley analyst estimates |
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|
Index Participation |
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Price Chart |
|
Index Name |
Weight |
|
All Ordinaries |
0.07% |
S&P/ASX SMALL ORDINARIES |
0.66% |
S&P/ASX SMALL INDUSTRIALS |
1.04% |
S&P/ASX 200 INDUSTRIAL |
0.10% |
S&P/ASX 300 INDUSTRIALS |
0.10% |
S&P/ASX 200 |
0.07% |
S&P/ASX 300 |
0.07% |
S&P/ASX 200 Diversified Financials (Industry Group) |
2.41% |
S&P/ASX 300 Diversified Financials (Industry Group) |
2.40% |
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Business Description
Australian Wealth Management (AUW) merged with Select Managed Funds Ltd, a provider of administration, investment management and financial advice services to superannuation funds, in 2006. The merged group is an integrated financial services company providing financial advice and distribution, master trusts and wrap products, funds management, stockbroking, self-managed super funds, estate planning, private client and corporate trust services.
Aspect Huntley – 29072008
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