TRANS­AC­TION CAP­I­TAL

Finweek English Edition - - INVESTMENT -

dis­as­ter as­set man­age­ment f irm An­chor Cap­i­tal says that the cur­rent pric­ing of the newly listed mi­crolend­ing and fi­nan­cial ser­vices group is wrong. Port­fo­lio man­ager Peter Ar­mitage told clients: “Our view is that the share is un­der­val­ued and is pric­ing in dis­as­ter – and so far there are no signs of that. On the con­trary, the com­pany an­nounced an im­pres­sive set of maiden re­sults yes­ter­day, with nor­malised HEPS up 17.1% to 81.6c (nor­malised earn­ings up 31.3%, but this was di­luted by the list­ing cap­i­tal raised, which re­sulted in some lazy cap­i­tal).”

BUY In a note to clients en­ti­tled: Trans­ac­tion Cap­i­tal – priced for the f inan­cials from last year, as you can imag­ine, the mar­gins in this busi­ness are huge. From sales of € 20.3bn, op­er­at­ing profit of €3.3bn was re­alised. The share trades at €104, and earn­ings for this year are ex­pected to come in around €4.88. A mul­ti­ple of 21 cer­tainly is not cheap but I never ex­pected it to be. This com­pany is ex­pe­ri­enc­ing dou­ble digit growth.”

SELL trad­ing up­date from the group. This is de­spite the loss of the group’s pre­vi­ous CEO and a num­ber of costs coming through in the most re­cent num­bers. He adds that the group still holds in­cred­i­bly valu­able In­tel­lec­tual Prop­erty (IP) that makes up its NAV of 24.5c/share and a tan­gi­ble net as­set value of 6.1c/share. With Ansys trad­ing at around 18c, this sug­gests there’s some value to be had here.

BUY

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