Barring surprises, it will be the last communication the company has with investors and the market, until the publication of full-year results on the 2nd of December.
AJ Bell’s share price remained largely unchanged following the release of its full-year trading update despite the fact that the announcement was full of positive numbers.
The number of customers using AJ Bell grew to 382,754 in the year to the end of September 2021, again of +30.0%.
Net inflows to the business rose by +52.0%, in this period, to £6.40 billion, more than +50.0% above the comparable figure in 2020.
Those inflows helped to push the assets under administration figure at the group up by +29.0% to £72.80 billion versus 2020’s figure of £56.50 billion.
Which as AJ Bell pointed out, was a growth rate that was ahead of both the FTSE All-share and MSCI World Index which were up by +24.0% and +27.0% respectively.
Advisory customer numbers grew by just over 18,000 or +17.0%. AJ Bell now has more than 126,000 advisory clients compared to 241,000 D2C or execution-only customers.
CEO Andy Bell said of the update:
“We have delivered another year of strong organic growth with total net inflows up 52%, AUA up 29% and customer numbers up 30%, compared to the previous year.”
“Our award-winning platform propositions, serving both the advised and D2C markets, enable us to capitalise on strong customer demand for long-term investment products, whether that be advised or self-managed”
Of course, the update only covered trading and said nothing about profitability at AJ Bell.
If we conduct an AJ Bell Share price analysis from both a technical and fundamental standpoint we find the following:
Since July AJ Bell stock has rallied from a low of 372p gaining 8.46% in the process and it has moved above its 20-day simple moving average and is closing in the 50-day line found at 410p currently.
RSI, or the relative strength index in AJ Bell, has been rising steadily through October, having touched and briefly dipped below the oversold boundary of 30 at the turn of the month.
However, recent candles on the daily chart have not been convincing on the upside, simply because we’ve closed closer to the lows than the highs of the day.
Fundamentally AJ Bell is on a premium rating with a price to sales ratio of 11.93 times. A price to book ratio of just over 14.0 times and a PE ratio of 35.50 times.
Sales and income have been growing at AJ Bell since 2016 and the recent trading update suggests that the top line at least continues to do so.
However, Andy Bell attributed that top line or sales growth to competitive pricing, and that could affect profit margins for full-year 2021.
Though at the half-year stage pre-tax margins were actually up +5.60%.
The fact that AJ Bell’s stock has remained largely unchanged since the update was posted, suggests that the good news on turnover, customer and asset growth, had already been priced in by the market.
City analysts have an AJ Bell share price forecast of 412p and an overall hold rating on the stock, which breaks down into one buy, two hold recommendations and two sell recommendations.
Barclays, which has a rating of underweight on the stock and 380 price target, reiterated its negative stance today, saying it saw little reason for material EPS (or earnings per share) changes in the update from AJ Bell.
So it looks as though investors must wait until December 2nd, and the full-year earnings, to find out what the market really thinks of the stock.
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