Turning Point?
AMP is a diversified financial services provider in banking, wealth management and capital assets investments fund manager.
AMP has been on a downtrend for many years if you look at the graph. Due poor acquisitions and recent Royal Commission into financial services in Australia. Which has lead to heavy fines for AMP, compensaction to individuals affected and class action.
But these are now mostly revolved besides class action from previous financial advisors working under their brand.
Since the Royal Commission, AMP has been cutting costs, writing of goodwill and assets, and selling of non-core assets.
AMP is about to demerge into 2 listed companies a bank and weath management business and a separate investment assets fund manager called Collimate capital. There is also speculation that are potential takeover bid for Collimate Capital prior to split.
However, if this falls through the demerger will proceed. AMP as a bank and weath manager will re-rate to similar PEs to similar businesses on ASX. The earnings of $202M x 12-14 is worth 2.4B-2.8B along when compared to its current Market Cap of $3.3B at $1.02.
Plus you will also get a share in Collimate capital which produced $152M last financial year but expected to drop to $102M due to divestments. If a PE of 10 is applied.
Then sum of parts is $3.4B-3.8B. On some conservative numbers. The demerger is to happen in 3-6 months.
So I think I convinced myself to buy some more. Note I own some at $1 full disclosure.
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