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Pinnacle Investment Management Group Ltd PNI

Morningstar Rating
A$11.63 −0.03 (0.26%)
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Company Report

Australia Asset Managers: Signs of Stabilization but Still Weakening Against Passive Investments

Share prices of ASX-listed asset managers fell for most of 2023 but broadly rebounded late in the year in anticipation of lower interest rates. Stabilizing interest rates generally enhances investor risk appetite, thus boosting fund flows, asset prices, and earnings for asset managers. Globally, net annual fund flows into open-ended, money market, and exchange-traded funds turned positive in March 2023 after close to six months of net outflows. This reflects a stabilizing US federal-funds rate and an increased likelihood of rate cuts in 2024. In Australia, the prospect of cuts in the Reserve Bank of Australia’s cash rate in the near term is likely positive for flows into Australian-domiciled funds—consisting of ETFs, industry funds, and active managers.

Price vs Fair Value

PNI is trading at a 8% premium.
Price
A$11.89
Fair Value
A$16.00
Uncertainty
High
1-Star Price
A$95.84
5-Star Price
A$7.70
Economic Moat
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Capital Allocation
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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$11.66
Day Range
A$11.6311.83
52-Week Range
A$7.4312.11
Bid/Ask
A$11.62 / A$12.10
Market Cap
A$2.36 Bil
Volume/Avg
360,741 / 392,891

Key Statistics

Price/Earnings (Normalized)
29.13
Price/Sales
45.45
Dividend Yield (Trailing)
3.10%
Dividend Yield (Forward)
3.10%
Total Yield
3.10%

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 Core
Total Number of Employees
118

Competitors

Valuation

Metric
PNI
PTM
PPT
Price/Earnings (Normalized)
29.137.4512.38
Price/Book Value
5.431.941.26
Price/Sales
45.453.032.23
Price/Cash Flow
23.198.6412.79
Price/Earnings
PNI
PTM
PPT

Financial Strength

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

Profitability

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