Online stock brokers and securities managers are seen as a stock game on the growth in the stock market, which is rising and falling in line with the market sentiment.
Ups and downs
These are not the only factors being played. If they were, all the investment platforms would perform about the same, and they didn't. For example, Hargreaves Lansdown (LSE: HL) trades 85% higher than five years ago, while Charles Stanley Group (LSE: CAY) has fallen nearly 30%.
Last year I said Charles Stanley finally showed signs of recovery, and the stock is up 25% over the last four months. Today, it reported the annual result …
Online equity managers and securities managers are seen as an acceptable stock market entry, rising and falling in line with market sentiment.
Ups and downs
These are not the only factors at stake though. If they were, all the investment platforms would perform about the same, and they didn't. For example, Hargreaves Lansdown (LSE: HL) is 85% higher than five years ago, while Charles Stanley Group (LSE: CAY) has fallen almost 30%.
] Last year I said Charles Stanley finally showed signs of recovery, and the stock is up 25% over the past four months. Today, it reported the profit for the year to March 31[ads1] and the share price remains unchanged at 320 p. This is despite an increase in discretionary funds of 6.5% to NOK 13.1 billion, while revenues rose 2.8% to 155.2. NOK million with growth in all divisions.
before tax of £ 11.6m, an increase of 6%, while pre-tax profit margins improved from 8.8% to 9.2%.
But with r pre-tax profits were reduced from £ 11.4 to £ 11m, investors remain undervalued. The group also warns that " given the scale of the stock market rally earlier this year, we expect much more modest returns over the rest of the year."
It is said that long-term prospects remain positive, but "stocks are likely to pause for breath until evidence of better economic growth emerges."
Take your time
Charles Stanley has strengthened his balance sheet, increased his cash position 23.7% to NOK 81.2 million, and raised his regulatory solvency ratio from 177% to 214%. Management expects to incur NOK 9.5 million in restructuring costs over the next two to three years, which should result in annual savings of more than NOK 4.5 million from 2022 onwards.
CEO Paul Abberley said it is now on the right track to deliver a mid-term margin of 15% over the medium term. But in light of the negative outlook, it is an expensive forecast valuation of 18.5 times earnings and ok, but not great yield of 3.5%, I have no hurry to buy.
Only way is up
Charles Stanley is a £ 160m memory compared to £ 10.5bn FTSE 100 big fish Hargreaves Lansdown. If you kick yourself for not buying Hargreaves Lansdown stock a few months ago, you're not the only one. It took full advantage of this year's surprising stock market recovery to climb nearly 40% over the months.
Hargreaves continues to grow. In the year of April 30, it won a new venture of £ 2.9 billion, attracting 55,000 new customers to raise its total to $ 1.19 billion, and increased revenue 8% to 395.9 billion. CEO Chris Hill drew political and macroeconomic uncertainty to claim "We are well positioned to deliver attractive growth."
As you were
city analysts expect Hargreaves Lansdown to enter an additional 4% earnings growth this year, then 10% in the year to June 30, 2020. That will lift the return to 2.4%. something that may seem low, but this is partly due to strong share price growth as management has been progressive. The big concern is that it trades with a whole 36 times earnings, even though it is lower than last year 45 times.
The group also has a huge 75.3% return on capital employed. Betting against Hargreaves The Lansdown share price has been a lost bet for a decade. The question is, are you willing to pay a premium price?
Harvey Jones has no position in any of the aforementioned shares. Motley Fool UK has recommended Hargreaves Lansdown. Views expressed on the companies mentioned in this article are the author's and may therefore deviate from the official recommendations we make in our subscription services, such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool, we believe that the assessment of a diverse selection of insights makes us better investors.