IFL - who's got the goss?

[stephen]

I've had my eye on IFL for some time. I didn't buy in the end, because I have trouble figuring out how much of their earnings are real and how much are a consequence of revaluing existing assets. Their growth and ROE are either ho-hum or spectacular depending on your view of these revaluations.

They've had a very steady rise the last week or so.

Has anyone else been following them? I confess I'm still tempted, but I won't be buying until I'm confident I've untangled their books correctly.

[Lizard]

Stephen, I've got IFL from around $7.18. But to be honest, am not sure I've untangled the books at all well either. Agree totally with your comment - about them being either ho-hum or spectacular depending on interpretation...

Anyway, have to admit that they baffled me, so decided to hold them as a trend-trade in a reasonable sector and review it once I had another 6-12 months of accounts.

[Lizard]

Accounts out yesterday. I didn't think they were exceptional, but the share price has gone nuts today - particularly with the clarification of earnings growth expectation of 15% for the coming year. Now $9.20, though I'm not sure why?!

[COLIN]

Insurance/Wealth Management companies don't seem to get much mention on ST, with most punters besotted principally with the mining stocks. A couple I invested in, in the second half of last year, are IFL and CGF, both of which have shown quite spectacular progress since last March. Now there seems to be some speculation that ANZ are interested in taking over IFL, hence the good upward spurt today, no doubt. There is a view that rationalisation of the industry is taking place, as witness e.g. the AMP/AXA/NAB struggle. The high level of required superannuation contributions across the ditch is a great generator of investment funds.

[macduffy]

I'd suspect that there are quite a few IFL shareholders around here, given that AUW, the funds management arm spun off from Tower a few years ago, merged with IOOF (IFL) last year.

As mentioned, compulsory super underwrites the attractiveness of the industry to Aussie investors and the tussle between NAB and AMP for AXA's Aust and NZ businesses adds takeover speculation to the sector. IFL has benefitted from this with its SP rising over 160% from a low of $2.40 in March to a current level around $6.40!

Disc: I hold, courtesy of the Tower/AUW/IOOF business.

[macduffy]

It's hard to believe than no-one seems interested in IFL, considering the Tower/AUW connection but I'm pleased to report that it gained 6% today to $7.33.

Immediate cause is probably the bid for Prudential although yesterday's FUMS report, which showed a steady increase in these numbers, may also have had an influence. The proposal to buy one of NAB's management platforms seems to have been put on the backburner now that the NAB/AXA merger is off but the possibility of a deal there may recur.

I'm particularly pleased about this stock because it's one that I've considered selling a few times at prices well short of $7.33!

[pierre]

I'm certainly interested in IFL though, like you macduffy, inherited them through Tower/AUW and have never known enough about the company to bother about buying any more. It's been a volatile performer over the past couple of years and would have been a great share for an active trader.

However, I'm happy to sit on my effectively free investment in IFL, add the divies to my Aussie bank account and enjoy the ride on the price.

Where did you read about the Prudential bid - haven't caught up with that news.

[COLIN]

It's hard to believe than no-one seems interested in IFL, considering the Tower/AUW connection but I'm pleased to report that it gained 6% today to $7.33.

Immediate cause is probably the bid for Prudential although yesterday's FUMS report, which showed a steady increase in these numbers, may also have had an influence. The proposal to buy one of NAB's management platforms seems to have been put on the backburner now that the NAB/AXA merger is off but the possibility of a deal there may recur.

I'm particularly pleased about this stock because it's one that I've considered selling a few times at prices well short of $7.33!
McD: Take heart, others are interested! I have held since Aug 2009 when I purchased at $4-64. They are part of my core longer-term holding, being of a much more stable nature than many others I hold. Like you, I have also been tempted at times to sell, but have held off. Good to see today's rise.

[OldRider]

I hold some of these, acquired same route as macduffy, but doubled holding in June 09, IRR since Feb 2005 formation of AUW
19.33%, close to 100% gain since merger in May 2009.
Present CGVI 25 with div return close to 5% so not looking to sell at the moment

[macduffy]

Where did you read about the Prudential bid - haven't caught up with that news.


Sorry, pierre.

I meant Perpetual of course!

Cheers

[macduffy]

IFL now trading above $8 now.

No recent news so probably a sector thing with interest in the Aussie fund managers generally.

I continue to hold.

[COLIN]

IFL now trading above $8 now.

No recent news so probably a sector thing with interest in the Aussie fund managers generally.

I continue to hold.

Yes, aren't we glad we held on, McD.

I haven't picked up any hint of any special reason for today's movement.

[macduffy]

This from FN Arena.

"IFL - IOOF HOLDINGS LIMITED
Citi rates IFL as Upgrade to Hold, Medium Risk from Sell (3) - Target $7.55 (was $6.75). Citi analysts have upgraded, partially on the back of a better outlook for equity markets but also on better industry conditions and operational improvements at IOOF. Forecasts have been lifted by around 3%.
Platform integrations are reason for optimism, but the analysts note IOOF is still suffering from net funds outflows for many products.

Target price is $7.55 Current Price is $7.85 Difference: minus $0.3 (current price is over target). If IFL meets the Citi target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).

The company's fiscal year ends in June. Citi forecasts a full year FY11 dividend of 39.00 cents and EPS of 49.60 cents . At the last closing share price the estimated dividend yield is 4.97%.

At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.83.

Market Sentiment: 0.3 "

Meanwhile, I've been happily holding!

[macduffy]

Still holding this one Colin?

Shareprice has lost a fair bit since the heady $8 days but a good result today, underlying profit up 15% and an increased dividend.

Market likes it too and SP up 6% today.

I'm holding.

[soulman]

I bought today, due to the probability of average.

IFL have been knocked down from the high $6 and the result today illustrate that the CEO are confident of IFL prospects in the years ahead. The dividends are sweet as well.

[drillfix]

I bought today, due to the probability of average.

IFL have been knocked down from the high $6 and the result today illustrate that the CEO are confident of IFL prospect in the years ahead. The dividends are sweet as well.

The daily looks good there soulman, Macd about to cross over on histogram and signal line, rsi moving upward and strong above 50, upward move on OBV and DMI seems set to cross.

Yikes, I should have maybe jumped in myself for a couple of days as the daily candle now rides above the 13ema, but a 2nd one is still a good entry and added confirmation.

Only caution I would take would be finger on the pulse of global market condions (and futures) and keeping eye on the stock reaching and staying above 6.00, although there are some signs that the Hourly MACD histogram showing slight divergence.

Good luck with this one folks, more tomorrow I guess.

[macduffy]

It's been a while since anyone posted on IFL - a bit surprising considering the number of NZ investors who would have "inherited" shares via the Tower/Tower Aust/Aust Wealth Mgt/IFL moves of recent years.

The AFR today is carrying a report of rumours of interest in the sector again, specifically mentioning IFL as a likely target.

I hold a few from the aforementioned reorganisations and have added a few more since.

[macduffy]

IFL profit up 312%.

http://www.smh.com.au/business/earnings-season/ioof-profit-surges-more-than-300-20130823-2sfsb.html

Anyone else holding these?

You must hold a few, percy? They are said to be "well positioned".

[macduffy]

No-one else seems to be interested but IFL have announced a merger with SFG Australia. The market likes it - IFL up today in an otherwise soggy market.

http://www.theage.com.au/business/markets/ioof-shadworth-financial-in-600m-merger-20140516-38dnx.html

[Arbitrage]

Share price 90 MA trend is still downwards. Other wealth managers are doing well (eg HGG and AMP). Perhaps this is the beginning of something. ASB values it at $10.

[soulman]

No-one else seems to be interested but IFL have announced a merger with SFG Australia. The market likes it - IFL up today in an otherwise soggy market.

http://www.theage.com.au/business/markets/ioof-shadworth-financial-in-600m-merger-20140516-38dnx.html

MacDuff, IFL has been one of the worst performer in this otherwise stable bull market.

I wonder why? Maybe just the way traders do their job. Drawing interesting lines on the chart. :0

[mark100]

I got into SFW when it dropped below 70c a few months back but sold after the interim result. They didn't have net inflows for the half and all the FUA had grown simply from 'market movement'. On that basis I deemed them too expensive.

HGG is really growing FUM well through net inflows. I've got a small holding in HGG at the moment

[Arbitrage]

HGG share price seems to be levelling out at the moment after a good period of growth. Soulman, are the lines showing a buy for IFL?

[macduffy]

Those "interesting lines" seem to be bearing fruit, soulman. Up another 3.2% today.

[soulman]

Those "interesting lines" seem to be bearing fruit, soulman. Up another 3.2% today.

On a massive down day too MD.....Are you riding these. Bought a few at the low $8. But have sold out.

[Arbitrage]

Volumes up but still on a long term downward trend. Waiting for the air to clear on this one.

[Arbitrage]

This seems to be heading towards its ASB Securities valuation of $10. The tide looks like it may have turned.

[soulman]

A very decent result and a good outlook. Not suprising considering the share market has been performing well this year. Div yield among the best in fund managers around Australia.

[macduffy]

Yes, an excellent result. Record profit and record funds inflow - without counting the benefit of the recently acquired businesses.

Still holding these which have become a fixture in my longterm Aussie portfolio.

[macduffy]

Another strong result from IFL.

http://www.asx.com.au/asxpdf/20150226/pdf/42wwk6v8s7z5yg.pdf

:)

[macduffy]

IFL's bad press saw me quit these on Monday. Thought for a while that I'd been a bit hasty but the downtrend has continued as the accusations flow!

The end of an era - as far as I'm concerned - dating back through IOOF and Aust Wealth Mgt to Tower Aust!

http://www.theage.com.au/business/banking-and-finance/ioof-scandal-reaches-board-level-in-explosive-speech-by-senator-john-williams-20150624-ghwpct.html

[Arbitrage]

As a small shareholder one wonders how to predict this sort of thing. http://www.smh.com.au/business/banking-and-finance/ioof-research-division-under-fire-over-report-copying-20150626-ghwkvq

[macduffy]

As a small shareholder one wonders how to predict this sort of thing. http://www.smh.com.au/business/banking-and-finance/ioof-research-division-under-fire-over-report-copying-20150626-ghwkvq

The short answer is - you can't. When it happens it's best to leave it to others.

[Joshuatree]

Time to go against the crowd



From CLSA's analyst:


"The structural issues are old hat, revel in the “learning”

This analyst is a huge Adele Ferguson fan: her excoriation of the industry has, in the main, been correct and timely . . . her latest broadside misses, in our opinion, the mark (by a mile). We believe the advice industry is in the process of transforming itself, where the pained wailing of most practitioners is an indication that various reforms are both biting and hurting - this is good for the consumer and investors. By hook or crook (frankly, it’s irrelevant), IOOF is well positioned. Upgrade a notch to BUY.


Ours is not some vapid, myopic, self-interested industry response!
We have previously described IOOF’s strategy as ‘the lazy man’s quick fix - investors beware’, have admitted to being ‘all-round confused’ and (prophetically?) wrote: ‘never really “got” IOOF: to us it looked like another roll-up, another acquisition-led growth strategy which, over time, would stall and the true “cost” of those purchases/mergers would emerge’. This time, however, it’s different: while still something of an ugly duckling, looking ahead we see quality, rigour and potential. We have here a stormy teacup.


Culture: It’s the heart of any company
However, culture, in the main, doesn’t develop overnight, and neither does it in a vacuum - it develops around a strategic vision which, in our opinion, has recently coalesced: less vertical integration and more an advice-led platform. For more detail, read our 30 March 2015 Rainbows are visions... note. We believe the recent disposal of part of Perennial is an indication of this.


Risks, there are a few, but, then again, too few to mention . . .
IOOF has confirmed that it has followed its protocols around these sorts of issues: where deemed appropriate the Australian Securities and Investments Commission has been notified. The bigger impact is reputational - we believe this is the catalyst for IOOF to up the ante. We would like the company to outline what its “recovery plan” looks like. After all, it’s not about how you find yourself on the floor, it’s about how you get up. Could this “event” prove to be IOOF’s “quality” moment?


Valuation
Advice is central to IOOF. Its focus on delivering efficient, low-cost products to clients is beginning to get reflected in the strongly emerging flows to its advice and platforms businesses. Upside from leveraging its Best Advice initiative, A$20m synergies targeted for FY16, and the combined SFG adviser base expanding sales are near-term catalysts. Our target falls from A$10.88 to A$10.76 after our forecast change but still implies a 22.8% total return.

[macduffy]

[QUOTE][Could this “event” prove to be IOOF’s “quality” moment?
/QUOTE]

Perhaps. There'll probably be a time to have a look at this one again - once the SP settles and they sort out their "problems".

[Fisherking]

I purchased a few today, new to the ASX so don't follow my lead!

Looks to me as if this stock has bottomed out and I like the idea of a stock in recovery mode particularly when an event such as has unfolded is likely to focus management attention on swift resolution.

[Joshuatree]

IFL's bad press saw me quit these on Monday. Thought for a while that I'd been a bit hasty but the downtrend has continued as the accusations flow!

The end of an era - as far as I'm concerned - dating back through IOOF and Aust Wealth Mgt to Tower Aust!

http://www.theage.com.au/business/banking-and-finance/ioof-scandal-reaches-board-level-in-explosive-speech-by-senator-john-williams-20150624-ghwpct.html


That was my entry point; storm in a teacup beatup. Great results and outlook today.

Outlook
Mr. Kelaher said, “Commitment to consistent execution of our advice-led strategy means allkey metrics are trending in the right direction: growing adviser numbers; extremely strong netinflows; and productivity initiatives, which are all delivering financial benefits.
“Supported by positive industry fundamentals and demographic trends, IOOF’s uniquepositioning in the industry sees us well placed to deliver positive long-term outcomes for ouradvisers, their clients and our shareholders. As the industry continues to consolidate, there isample opportunity for acquisitive growth to augment our significant organic growth momentum.We have an exceptional track record of delivering value-accretive acquisitions and have thescale, experience and, importantly, financial strength, to take advantage of theseopportunities.”

S/P up re 6% to $10.67 atm but may well drop back as the day goes on.

[Joshuatree]

PDF (http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01908577)

Highly complementary
Increases scale
Attractive valuation
s/p 16/10 $11.26

[Joshuatree]

Share Purchase Plan (https://hotcopper.com.au/threads/3780642/) @ $10.60 or less for up to $15000 worth after $461 mill placement to sophs and instos @ $10.60. S/P atm $11.Really big vols going through in the last week or so.

[Joshuatree]

$78 mill (target $100 mill) taken up in spp @ $10.51. S/P $10.50 atm. Looks like a rare situ where us little holders did better than the instos who paid $10.60 i believe and maybe a flat s/p for a while imo.

[Joshuatree]

Got my $15000 worth in spp. S/p recovered extremely well, $11.17 atm.:t_up:

[Joshuatree]

The Royal commission has got folks running scared with these Investment management stocks .IFL( x 27c dive) still falling away, thrown out with the bath water unfort. Knives raining down atm..