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Pinnacle Investment Management Group Ltd PNI

Morningstar Rating
A$15.44 +0.26 (1.71%)
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Company Report

Australian Asset Managers: Some Rerated, Others Did Not; All Face the Same Headwinds

Average earnings for the seven asset managers under our coverage—Challenger, GQG, Insignia, Magellan, Perpetual, Pinnacle, and Platinum—will likely improve over the near term to fiscal 2025, but moderate thereafter. This is partly due to our expectations for continuing net outflows, on average. While potentially lower rates in fiscal 2025 could lead to a cyclical flow uplift, any benefits may be short-lived, as asset class rebalancing activity subsides. Given the cohort’s largely average peer-relative returns, we expect their FUM share losses to exchange-traded funds and industry funds to persist. Competitive pressures are also likely to weigh on fees and earnings.

Price vs Fair Value

PNI is trading at a 772% premium.
Price
A$15.44
Fair Value
A$88.60
Uncertainty
High
1-Star Price
A$99.48
5-Star Price
A$4.39
Economic Moat
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Capital Allocation
Ppmrsvcwf

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$15.18
Day Range
A$15.1615.44
52-Week Range
A$7.4315.54
Bid/Ask
A$15.31 / A$15.45
Market Cap
A$3.14 Bil
Volume/Avg
249,513 / 489,587

Key Statistics

Price/Earnings (Normalized)
38.67
Price/Sales
60.33
Dividend Yield (Trailing)
2.33%
Dividend Yield (Forward)
2.33%
Total Yield
2.33%

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 106 billion in April 2024, 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

Competitors

Valuation

Metric
PNI
PPT
PTM
Price/Earnings (Normalized)
38.6710.93
Price/Book Value
7.211.1144.83
Price/Sales
60.331.97
Price/Cash Flow
30.7911.29
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%
Return on Equity (Normalized)
18.45%5.67%
Return on Invested Capital (Normalized)
5.59%
Return on Assets
PNI
PPT
PTM
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