exactly and just look at how both Magellan and Platinum share prices evolved as FUM continued to decline.
Everyone screamed 'value and buy the dip', especially on Magellan, but that 'value' was a 'value trap', as earnings rely on the quantum of FUM x asset management margin.
As that FUM continues to decline over time future earnings just continue to decline, hence the 'value trap'.
So one cannot look at current earnings, one has to do a NPV where future earnings continue to decline: its not good.
Now at least PPT still has its Private Wealth and Perpetual Corporate. Both of these divisions whilst also subject to movement in asset class pricing, has some degree of earnings 'stickiness'.
God help us if stupid senior management and B.O.D sell off these two divisions.
PPT needs to stop all dividends, pay off debt and try to offload their acquired funds management businesses for whatever price they can get.
PPT Price at posting:
$15.63 Sentiment: None Disclosure: Not Held
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