Pinnacle Investment Management Group Ltd PNI

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A$11.24 +0.24 (2.18%)

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As of Apr 29, 2024 3:31am Delayed Price Open

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Company Report

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Australia Asset Managers: Stabilizing but Still Weakening Against Passive Investments (Corrected)

Shaun Ler, Mathew Hodge Apr 12, 2024

This note replaces the original version that accompanied our report "Industry Pulse - Australian Asset Managers: 2024 Q1," published March 14, 2024. We were recently made aware of inaccuracies in the net flow data for certain unlisted managers in that original report. As for our investment conclusions, we stand by our key assessments: the fair value estimates, moat, uncertainty, capital allocation, and star ratings for our Asset Manager coverage.

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Price vs Fair Value

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PNI is trading at a 3% premium.

Price

A$11.28

Apr 24, 2024

Fair Value

A$27.00

Nov 16, 2022

Uncertainty

High

1-Star Price: A$68.48
5-Star Price: A$4.20
Economic Moat: Qlfqyr
Capital Allocation: Ywvyxymvht

Bulls Say, Bears Say

Bulls

Pinnacle is known as a high-quality growth partner for well-performing boutique managers. There is potential for further earnings upside through increased distribution and new boutiques.

Bears

Pinnacle’s boutiques are typically smaller (that is, have less FUM) than stand-alone listed managers, meaning there is greater risk for them to be nonviable if there is a major fall in capital markets or large client redemption.

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Trading Information

Previous Close Price: A$11.00
Day Range: A$11.13–11.33
52-Week Range: A$7.43–12.11
Bid/Ask: A$11.24 / A$11.25
Market Cap: A$2.28 Bil
Volume/Avg: 79,495 / 359,429

Key Statistics

Price/Earnings (Normalized): 27.55
Price/Sales: 42.98
Dividend Yield (Trailing): 3.31%
Dividend Yield (Forward): 3.31%
Total Yield: 3.27%

Company Profile

Pinnacle Investment Management Group is an Australia-based multi-affiliate investment management firm. The principal activities of the firm are equity, seed capital and working capital, and providing distribution services, business support, and responsible entity services to a network of boutique asset managers, termed as "affiliates." Apart from deriving revenue from its services, Pinnacle also earns a share of profits from its affiliates via holding equity interests in them. The business is growing rapidly with number of boutiques and FUM growing to 15 and around AUD 100 billion in December 2023, respectively, from seven and AUD 23 billion in December 2016.

Sector: Financial Services
Industry: Asset Management
Stock Style Box: Mid Growth
Total Number of Employees: 118
Website: http://www.pinnacleinvestment.com

Competitors

Valuation

Metric	PNI	PPT	PTM
Price/Earnings (Normalized)	27.55	11.76	7.76
Price/Book Value	5.13	1.20	1.92
Price/Sales	42.98	2.12	3.00
Price/Cash Flow	21.94	12.14	8.56

Price/Earnings

PNI

PPT

PTM

Financial Strength

Metric	PNI	PPT	PTM
Quick Ratio	—	0.90	—
Current Ratio	—	1.43	—
Interest Coverage	—	2.26	—

Quick Ratio

PNI

PPT

PTM

Profitability

Metric	PNI	PPT	PTM
Return on Assets (Normalized)	14.16%	3.30%	22.10%
Return on Equity (Normalized)	18.45%	5.67%	24.14%
Return on Invested Capital (Normalized)	—	5.59%	—

Return on Assets

PNI

PPT

PTM

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