Our take on Three Fund Managers!

Platinum Investment Management Limited

     PTM Dividend Details
 
Solid investment performance and returns: Platinum Investment Management Limited (ASX: PTM), trading as Platinum Asset Management Limited, reported a revenue increase of 12.7% year on year (yoy) to $360.4 million in FY15, against $319.8 million in FY14, driven by 19% yoy increase of management and admin fee to $338.6 million during the period. The company reported a pre-tax profit increase by 15.5% yoy to $301.6 million, while the net profit after tax rose by 12.4% yoy to $213.5 million in FY15. Platinum Asset Management’s average funds under management rose by 17.3% yoy to $26.1 million during the fiscal year. Meanwhile, the group successfully raised over $292.9 million for platinum Asia Investments Limited. Platinum international fund delivered a return of 13.4% since its inception, as compared to the MSCI All country world net index returns of 6.7%. The PTM stock surged over 7.77% (as of Oct 28, 2015) in the last four weeks driven by its better FY15 results and solid platinum Asia Investments listing response.



Inflows and net flows performance (Source: Company Reports)
 
We believe the positive momentum in the stock to continue in the coming months with the group’s efforts on increasing exposure in Asia coupled with declining Australian dollar. Of course the Funds under Management which are linked to global portfolio performance have an exposure to high-risk assets and global market volatility. However, the company seems to benefit from global stock markets’ rebound and an improved market sentiment is reflected. Platinum Asset Management also has a decent dividend yield of 5.03%. We maintain our “BUY” recommendation on the stock at the current price of  $7.21
 
 

Magellan Financial Group Ltd

 


MFG Dividend Details
 
Delivered solid funds under management performance: Magellan Financial Group Ltd (ASX: MFG) has been improving its funds under management, which rose to $38.7 billion as of September 2015, as compared to $38.1 billion in August 2015. The group’s funds management business delivered a solid increase in revenues to $255.9 million during the fiscal year of 2015, against $139.1 million in the last fiscal year. Accordingly, the fund’s under management profit before tax rose to $203.3 million during the period as compared to $102.5 million in prior corresponding period (pcp). Magellan Global Fund delivered 27.5%, after fees, during the twelve months to 30 June 2015, beating the MSCI World Net Total Return Index (AUD) which figured 18.3%. The Magellan Infrastructure Fund also witnessed a solid performance delivering 14.8%, after fees, during the 12 months to 30 June 2015, surpassing the Global Infrastructure Benchmark.
 


Group Result Overview (Source: Company Reports)
 
Magellan Financial Group also launched the ASX quoted version of Global Equities strategy, Magellan Global Equities Fund during the period. The group also entered into new agreements with AMP and BT/Westpac who have launched new funds in their respective platforms replicating the Magellan Global Fund, similar to the Colonial First State Magellan Global Fund Option (CFS) on the Colonial First State Platform (operated by Commonwealth Bank). For the company, retail inflows remained strong ($173 million in Sep-15) and institutional flows also witnessed a recovery ($771 million). However, one needs to consider the risks related to movements in equity markets affecting FUM and revenue, foreign exchange rate fluctuations and investment performance. MFG shares delivered a year to date returns of 31.7% (as of Oct 28, 2015) and rallied over 14.30% in the last four weeks. Presently, the stock is trading close to its 52 week high price. We recommend investors to “HOLD” the stock at the current price of  $21.83
 
 
 

Contango Microcap Ltd

            CTN Dividend Details
 
Maintaining a diversified portfolio, launching new products: Contango Microcap Ltd (ASX: CTN) recently reported that its net tangible assets after tax decreased to $1.004 in September 2015, from $1.043 in August 2015. The group’s preliminary results, reported a net loss after tax of $0.73 million in fiscal year of 2015 as compared to a net profit after tax of $32.53 million in the corresponding last year, impacted by poor June 2015 performance, even though the eleven months ended on May 2015 delivered a net profit after tax of $10.8 million. On the other hand, the group has a diversified portfolio comprising 60 to 90 firms listed on ASX, with a market cap in the range of $10 million to $3350 million at the time of acquisition. CTN selects the firms which promise to be a potential large cap. The group is also launching new products to enhance its shareholder value, investing in best practices as well as building its investment team. The group launched Contango Income Generator Limited (CIE), for investors looking for yield stocks in the equity market, for retirees, high net worth investors as well as investors who are over exposed to large cap stocks. Contango has delivered 2.1% annual returns to June 30 2015, as compared to 0.4% annual returns of S&P/ASX small companies Accumulation Index, and negative annual returns of 3.6% for S&P/ASX emerging companies Accumulation Index. S&P/ASX the All Ordinaries Accumulation Index generated over 5.7% annual returns.



Result Overview (Source: Company Reports)
 
The company has an annual dividend yield of 3.89%. We believe that CTN has the ability to deliver a decent performance for the fiscal year 2016 and accordingly, we give a “BUY” recommendation to the stock at the current price of $0.945
 

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