Now of­fer­ing se­ri­ous value

Finweek English Edition - - In Brief In The News -

I liked Coro­na­tion over a year ago when it was at around 6 000c/share. Now, at be­low 5 000c/share and with a div­i­dend yield of over 9%, I re­ally like it.

Re­sults for the year to 30 Septem­ber saw its head­line earn­ings per share (HEPS) and div­i­dend down 4%, while as­sets un­der man­age­ment (AUM) was also down. Out­flows do seem to have slowed.

Cer­tainly this has been an­other tough year for the busi­ness, but the price is re­flect­ing much tougher con­di­tions and of­fer­ing some se­ri­ous value.

The div­i­dend yield it­self is a great rate to be paid for hold­ing the share, while the mar­ket capto-AUM is also at his­toric lows. A mar­ket cap of some R17bn and AUM of R587bn re­sults in a ra­tio of 2.9%, whereas the av­er­age is 3.5% to 4.5%. So, a de­cent dis­count to the av­er­age then.

As­set man­age­ment, and Coro­na­tion, is not go­ing away. While bleak lo­cal mar­kets and a con­sumer un­der pres­sure have hurt them, nei­ther of those two events are per­ma­nent.

When things start to im­prove, Coro­na­tion will see a pick-up in their AUM, re­sult­ing in higher prof­its and ul­ti­mately the share price. ■

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