Anchor Capital preparing for lift off - again

by , 09 April 2019
Anchor Capital preparing for lift off - again
In September 2014, Anchor Capital's shares closed 75% higher from the day it listed at a price of R2. The next day saw it close another 28.85% up. Investors dubbed it the “new kid on the block” as asset managers pushed it higher week after week.

After six months, investors who secured the stock at R2, gained 300%. The share price defied gravity to hit a high of R18.99 prior to Nene-gate; before plummeting back to current levels. Levels last seen on that first trading day back in 2014.
   
Asset managers share prices typical follow the cycle of the market and economic sentiment. And right now, global sentiment is improving, the US Fed signaled interest rate increases should only resume in 2020.
  
The ECB and BOE are likely to keep loose monetary policy inline with the US hiking cycle; and a “de-escalation” in the trade wars.
  
Looking at the numbers, we should see an improvement from increasing asset management fees as the market rises, a once off termination fee boosting earnings over 90% and new products attracting additional capital from clients.
  
On a PE of less than 10 and a dividend yield near 6%, investors who buy shares at these levels will have a significant margin of safety.
  
Buy Anchor Capital (JSE: ACG) below R3.75 with a target of above R7.00
 
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The week ahead:  
 
Local Data: Manufacturing: Production and sales (11/04)
 
Results Due: AHL, APH (08/04); SNH (11/04); NFP, PFB (12/04)
 
LDT (09/04): ABG, ABSP, ADH, GLPROP, DIVTRX, HIL, HLM, MSP, MND, MNP, NRP, PREFTX, REM, SLM, SLMJ, SLA, SFN, SHG, SBK, SBKJ, NBS
 
Final Dividend: AFE, AFX, AOX, ANG, BEL, EPP, LBH, LBR, MPT, NED, NBK, SAC, SBV, SVN, SBKP, SBPP, SBPPJ (08/04); LHN (09/04)
 
Other Economic data releases of interest…
 
Tuesday: Unemployment Rate (CH); Italian Retail Sales (EU); NFIB Small Business Index, JOLTS Job Openings, FOMC Member Clarida Speaks (USA); 10-y Bond Auction (UK); Bank Lending, PPI (JP)
 
Wednesday: GDP, Manufacturing Production (UK); Main Refinancing Rate, Monetary Policy Statement (EU); CPI, Crude Oil Inventories, FOMC Meeting Minutes (USD)
 
Thursday: OPEC Meetings (All day); RBA Financial Stability Review (AUS); Trade Balance (CNY); PPI (USA)
 
Friday: Treasury Currency Report (USA)
 
 


Anchor Capital preparing for lift off - again
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