Aberdeen Asset Management - Wheel of Fortune

Aberdeen Asset Management: Whilst wearing its tartan heritage with pride, this is now a well spread international fund management group. The pre-close update showed a marked improvement in net flows, with AUM at £331.2bn against £322.5bn at June 2014. The keystone Asia Pacific business moved back into positive flows as did the Global Equity strand. Having originally claimed that the buy and build days were over the temptation to buy SWIP proved too much for Aberdeen but that acquisition is bedding in well now and they saw modest outflows of only £0.7bn. Aberdeen is renowned for its Far East expertise, based around Hugh Young in Singapore. The recent strength of the dollar has raised concerns that the whole carry trade in emerging markets is coming to a crunch and this would not suit Aberdeen for one. But this is arguably already reflected in a share price that has fallen around 10% in the last quarter and they have weathered such asset class storms in the past. That leaves the valuation metrics to consider. Looking to the year just commencing Digital Look has consensus earnings at 33.75p, a PE of 11.9x at 400p and a yield of 4.9% on a dividend forecast at 19.6p (1.7x covered). Growth in earnings (and dividends) has the scope to hold above 10% and the balance sheet is ungeared with cash set potentially to reach £400m by September 2015 on the back of retained earnings. The EV of around £5.1bn is only around 1.5% of  AUM at £331.2bn, which is reasonable. So, Aberdeen at 400p looks to be offering an attractive (and growing) yield, coupled with a strong balance sheet and good market positions and is worthy of investors interest. (Neil Cumming, 30th September 2014)

These comments are not a personal recommendation to deal. Any investments can fall as well as rise in value, so you could get back less than you invest. I may have a financial interest in some of the stocks written about. www.dividendpower.co.uk