ABRDN PLC (ABDN)

[WickedLester]

I've been buying shares in deeply unloved and heavily shorted ABRDN and think if and when markets do recover there is money to be made.

I believe the intrinsic value is twice the current share price and at some point if the price stays down it will attract the attention of activists.

It's been a poor performer for some time and the ridiculous "disemvowelling" of the name wasn't an impressive move but the dividend yield (which may not be safe past this year) is currently ~10%.

The market cap is currently about £3.22bn and I have seen estimates of a breakup value of around £5.5bn. Net tangible assets excluding the pension surplus are currently about £3.7bn so a very strong balance sheet.

The whole sector appears out of favour at the moment (probably unsurprisingly) but,ever the contrarian, that has piqued my interest. I also have some shares in Ashmore which has suffered very heavy falls in AUM but has a very strong balance sheet and am eyeing up Quilter at the current price.

Any Fools have an opinion on ABDN or the sector as a whole?

[Dod101]

I've been buying shares in deeply unloved and heavily shorted ABRDN and think if and when markets do recover there is money to be made.

I believe the intrinsic value is twice the current share price and at some point if the price stays down it will attract the attention of activists.

It's been a poor performer for some time and the ridiculous "disemvowelling" of the name wasn't an impressive move but the dividend yield (which may not be safe past this year) is currently ~10%.

The market cap is currently about £3.22bn and I have seen estimates of a breakup value of around £5.5bn. Net tangible assets excluding the pension surplus are currently about £3.7bn so a very strong balance sheet.

The whole sector appears out of favour at the moment (probably unsurprisingly) but,ever the contrarian, that has piqued my interest. I also have some shares in Ashmore which has suffered very heavy falls in AUM but has a very strong balance sheet and am eyeing up Quilter at the current price.

Any Fools have an opinion on ABDN or the sector as a whole?

I am not personally into trading opportunities and have no idea of the break up value but obviously if your quoted figure is anything near correct well you could be right. The whole fund management sector has been out of favour for a long while though and that value depends on getting people with deep pockets and patience to buy into it. Furthermore Aberdeen itself has been very poorly run for years. Its success depended on doing deals and the culture is all wrong. The relatively new CEO is controversial and the Chairman is, I read somewhere, not the sort of chap to confront the CEO. By that I mean that if your idea of a break up does not come to pass (or at least not in the timescale that your patience may allow) there is not even a decent business to fall back on. As an income share it might be OK but I would not count on it.

Dod

[Gerry557]

When it was Standard life it seemed to do ok and then the merger seemed to be the time when it all started to go wrong. Its possible that it was going wrong before this but was masked.

Having two bosses never really worked well. The name change seemed silly and Ive not been tempted by the idea really. Maybe I just need an app or something.

Still things can often fall lower than value but Im not sure if it is there now. The name is all lower case, so at least you have increased the capital one way.

[scrumpyjack]

I continue to be pessimistic about them. Performance and reputation is critical to an asset management business and they have managed to fall back on both counts. Then they have high fixed costs and as they lose business their profitability will continue to fall as they can't cut the 5,000 head count and other costs quickly enough. The supposed NAV will evaporate in trading losses, restructuring costs and paying dividends they have not earned.

Sorry but I can't see why anyone would take them over. Strong performing investment managers, like Smith and Train, can build up their business without swallowing a dinosaur!

[EverybodyKnows]

I like the dividend. The share price is terrible. I hope for a takeover soon. It is difficult to see an alternative future for it.

[Dod101]

When it was Standard life it seemed to do ok and then the merger seemed to be the time when it all started to go wrong. Its possible that it was going wrong before this but was masked.

Having two bosses never really worked well. The name change seemed silly and Ive not been tempted by the idea really. Maybe I just need an app or something.

Still things can often fall lower than value but Im not sure if it is there now. The name is all lower case, so at least you have increased the capital one way.

The trouble is that Aberdeen as it was, was never Standard Life which was a perfectly good standalone business but Martin Gilbert was always looking for deals and obviously thought that merger would be a good idea. He always thought that! Then of course they sold off the risk insurance bit to Phoenix, retaining the fund management side. Now a total mess.

Dod

[Lootman]

I would never invest in Aberdeen anyway. I still haven't forgiven them for being the cheerleaders for the split capital IT debacle 20 years ago.

My real concern is that they screw up Interactive Investors which, for a similar period of time and along with its predecessors, has served me well.

[scottnsilky]

Thank you WickedLester for starting this thread, I've wanted to vent my spleen over this serially disappointing company for some time. I really, really, really want to sell, but not at the presently depressed price. I originally bought at the demutualisation IPO, not sure of the year, but I paid around 220p, I was happy with the appreciating sp and dividends for a few years, I then bought Aberdeen Asset Management and as we all know they 'amalgamated ', so I ended up with two separate batches of SLA. Since then of course things have gone from bad to worse. The present dividend might be good if you bought at the right price, but its not good enough for me. The divi cut in 2020 dropped my payout by about 30% that year, the best year, from my paper records was 2018 when the sp on Jan 1st was 436p, so Fridays sp is down nearly £3, of course there have been consolidations and other sleights of hand in the mean time. Time for me to exit, but not at the present price.
I have too much in the financials anyway with MNG, LGEN, CSN and a tiddler, City of London investment Group (CLIG), all of which I'm happy to hold even at today's depressed prices, they're high yielders, abdn is not. A take-over might suit me well.

Sorry if I've gone on a bit, I really needed to get it off my chest.

[Dod101]

Thank you WickedLester for starting this thread, I've wanted to vent my spleen over this serially disappointing company for some time. I really, really, really want to sell, but not at the presently depressed price. I originally bought at the demutualisation IPO, not sure of the year, but I paid around 220p, I was happy with the appreciating sp and dividends for a few years, I then bought Aberdeen Asset Management and as we all know they 'amalgamated ', so I ended up with two separate batches of SLA. Since then of course things have gone from bad to worse. The present dividend might be good if you bought at the right price, but its not good enough for me. The divi cut in 2020 dropped my payout by about 30% that year, the best year, from my paper records was 2018 when the sp on Jan 1st was 436p, so Fridays sp is down nearly £3, of course there have been consolidations and other sleights of hand in the mean time. Time for me to exit, but not at the present price.
I have too much in the financials anyway with MNG, LGEN, CSN and a tiddler, City of London investment Group (CLIG), all of which I'm happy to hold even at today's depressed prices, they're high yielders, abdn is not. A take-over might suit me well.

Sorry if I've gone on a bit, I really needed to get it off my chest.

Presumably you originally bought Standard Life, a decent enough standalone life insurance company. I do not know why they decided to go along with Aberdeen.

You may wait a long time to get a price you would find acceptable. I have felt the same with other shares but would no longer hesitate to get out. Why do you think the share price might recover? And over what period anyway? If you have lost faith in a share then there is only one thing to do, get out at almost any price. Why do you think anyone would want to take it over and at what price anyway?

Dod

[WickedLester]

Since starting this thread the price has risen a fair bit to around £2. I won't claim any great foresight, much of the market has bounced. Having made a reasonable profit and also a decent dividend I took the opportunity to sell out as I wonder whether this rally really has legs.

I've put them on the watchlist and will keep an eye on them.