Ripe for the pick­ing

Finweek English Edition - - Marketplace - By Si­mon Brown

Coro­na­tion has had a tough time of it over the past three years as the lo­cal mar­kets have gone side­ways. It has also suf­fered from poor fund per­for­mance that saw out­flows from its funds, and hence fall­ing as­sets un­der man­age­ment (AUM). While the share price peaked at over 10 000c back in late 2014, it has now set­tled at around 6 000c to 7 000c and is look­ing ready for a buy.

The as­sump­tions for buy­ing are that AUM starts grow­ing again and Coro­na­tion starts gen­er­at­ing mar­ket-beat­ing re­turns, earning per­for­mance fees. It also has its in­ter­na­tional funds, which are gain­ing trac­tion.

None of the above is cer­tain but one has to trust that Coro­na­tion has qual­ity fund man­agers who will re­turn to at least a level of their for­mer glory, and from this will flow in­creased prof­its.

A fi­nal point is that with a div­i­dend yield of al­most 6.4%, you are be­ing paid very well to hold the stock, re­duc­ing the po­ten­tial risks that ei­ther AUM does not in­crease or that fund re­turns re­main un­der bench­mark.

With a div­i­dend yield of al­most 6.4%, you are be­ing paid very well to hold the stock, re­duc­ing the po­ten­tial risks that ei­ther AUM does not in­crease or that fund re­turns re­main un­der bench­mark.

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