ASI MUTUAL INITIATES INVESTMENT IN AMP LIMITED ASX:AMP
Announcement posted by ASI Mutual 24 May 2019
AMP - MAYBE A BEACON FOR THE NOT SO FAINT HEARTED CONTRARIAN INVESTORS
ASI MUTUAL
MEDIA RELEASE
ASI INITIATES INVESTMENT IN AMP LIMITED ASX:AMP
AMP Limited (AMP) is an Australian wealth management company, with an expanding (slowed) international and investment management business and a growing retail banking business in Australia. It provides retail customers in Australia and New Zealand with financial advice and superannuation, retirement income and investment products. The Company's brand and financial performance has suffered badly as a result of regulatory and compliance breaches unearthed by the Australian Royal Commission into banking and financials in the country.
As Australia’s well known wealth manager, AMP Ltd, posted a near nine-fold increase in cash outflows at its wealth management unit earlier this month in the wake of damaging revelations of misconduct via the Royal Commission, sending its shares down sharply. The 170-year-old company was accused of charging fees for no service and attempting to deceive regulators at a government-mandated Royal Commission inquiry last year, which led to the loss of its chairman and chief executive. The Company has haemorrhaged billions of dollars in funds under management and is facing class-action lawsuits.
The Company noted however, that its assets under management, which includes investment performance, rose 5 percent “with positive investment markets offsetting weaker cash inflows”.
Fresh blood takes hold of the reins.....At his first annual general meeting with the company, Chief Executive Francesco de Ferrari said he was focusing on restoring stability after last year’s upheaval, while chasing new growth opportunities as the Royal Commission had driven out some competitors.
“This transformation for AMP is going to be a multi-year journey and it will not happen overnight,” he told the meeting. (the contrarians swan song!)
Total Shareholder Return (inc div) ALL MINUS - 1yr: -42.20% 3yr: -22.70% pa 5yr: -11.94% pa
Morningstar Quantitative Ratings
Valuation Rating: Undervalued
Fair Value Estimate: $2.615
Fair Value Percentage Difference: 15.48% Undervalued
Liquidity: High
Contrarian Investing is an investment strategy that is characterised by purchasing and selling in contrast to the prevailing sentiment of the time. A contrarian believes that certain crowd behaviour among investors can lead to exploitable mispricings in securities markets.
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Michael de Tocqueville
Investment Director
ASI MUTUAL
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ASI MUTUAL is an Australian based private investment firm which acquires significant ownership positions in publicly-listed companies, only where medium to long-term value can be enhanced through constructive, active and engaging ownership. The Company is dedicated to active ownership investing in Australia however, investment opportunities may present themselves from other countries.
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