CCAP.LN - Charlemagne Capital

[oddballstocks]

An undervalued UK asset manager.  They manage a variety of mutual funds, a hedge fund, and pools of institutional money.

 

-35% of the market cap is composed of cash and investments.

-Trading at 2.24% of AUM

-Trading at 1.45% of AUM ex-cash and investments

-Directors own 33% of the company

-AUM has slide 5% since January but is up 20% YoY

-Management fees up 16%

-Just raised $120m for the hedge fund

 

I think the multiple is too cheap for the company, they're small and visibility is limited but should be trading much higher.

 

As for valuation I think the downside is 6p, upside 42p or more, they're currently trading at 16p.

 

I have a longer writeup on the blog: http://oddballstocks.blogspot.com/2011/08/another-undervalued-asset-manager.html

 

I am looking for all opinions and critiques!  I'm looking for any views on why this is a bad investment, or downsides.  I haven't purchased any yet, I'm sitting on it for a few days mulling it over.

[Partner24]

That industry is a very volatile one. Competition is fierce and capital can swith hands easily. If you want to invest in public businesses that manage capital, it's better to invest in people who have a permanent base of capital.

 

Just my opinion.

 

Cheers!

[rjstc]

I remember the people at Century Management were very high on William P Stewart and Co before 2008. All it takes is AUM for whatever reason to go down and like WP Stewart they can get crushed. It did then and so did CM. Better to be buying something like this when people aren't running scared so much and deciding to go to cash. I agree with Partner24