Navigator Global Investments Ltd (ASX: NGI) has lately witnessed growth in its Asset under management by $7.2 billion. The company has capitalized on the opportunities present in geographical areas such as the Middle East and Japan. We presume that the growing footprints in other regions and adding more assets in key markets like North America would work in the favor of the company going ahead.

Operating expenses hit bottom line:For the year 2018, AUM was close to $16.7 billion largely driven by $1.8 billion increase from the Lighthouse business in addition to $5.4 billion from Mesirow Advanced Strategies. EBITDA for the company has grown by 15% in FY18 and amounted to US$ 34.2 million over the previous year. Net revenue for the company stood at US$ 79.79 million in FY18 against the prior year. However, the operating expenses were substantially increased by 25 percent in FY18 against the prior year due to the rise in employee expenses during the same period. As a result, it impacted the overall profit of the company thereby cutting down the Earnings per share.


 5 years EBITDA growth (Source: Company Reports)

The company has rewarded its shareholders with consistent dividend payment. The dividend for 2018 was up 14% against FY17 at 16.0 US cents. On the other hand, the company signed an agreement to acquire entire client assets of Moscow Advanced strategies with the objective of creating further scale, expand skill-sets and enhance its distribution opportunities. MAS acquisition has brought in a new client relationship for NGI which would be beneficial for the company in the long run. We expect that the integration of existing and the new unique offerings will bring the positive impact for the company going ahead. Additionally, the group is also determined to expand its operations into the new territories over the coming year.

Navigator Global Investments is set to benefit with its multi-strategy fund in the event where equities and bonds lose money simultaneously.


 Dividend History (Source: Company Reports)

Stock Performance: Stock has outperformed the benchmark index generating year to date return of around 76.83%. Further, it is in secular uptrend making higher highs and higher lows. In the past one year, the stock has given stellar returns of around 121%. Just the price movement of the stock might give the impression that it has already rallied and should correct a bit. However, relative strength indicator (on a daily basis) does not show any sign of the stock being overpriced. Relative strength indicator seems to be sitting below the overbought zone, indicating that there is more room for the stock to grow.
The price is trading above its near term moving averages indicating good health of the stock. After breaking out above the level of over $6, the stock corrected and held on the support level of $5.2. It has rebounded from that level on firm buying. We believe that the bullish momentum would continue based on two key drivers (latest acquisition and technology platform solution) and maintain ‘HOLD’ rating on the stock at the current price of $5.88.
 

NGI Daily Chart (Source: Thomson Reuters)

 
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