A Look at three financial sector stocks- PTM, FXL, SZL

Australia’s funds under management (FUM) industry, also known as investment funds or managed funds is the sixth largest in the world and largest in the Asia-Pacific region, according to the survey produced by Washington-based Investment Company Institute (ICI). The global importance of Australia’s financial markets and intricacy of its managed funds industry indicates the country’s strengths in having the world’s:

• Fourth largest alternative assets under management (US$275 billion);
• Sixth largest managed fund (MF) assets under management (US$1.6 trillion);
• Eighth largest foreign exchange market (US$121 billion daily average turnover);
• Ninth largest stock market measured by free-float market capitalisation (US$1 trillion);
• Ninth largest high-net-worth market (US$735 billion);
• Tenth largest market for international and domestic debt securities combined (US$2 trillion).

Global Significance of Australia’s Financial Markets (Source: Australia’s Managed Funds Update)

Platinum Asset Management Limited (ASX: PTM)

Platinum Asset Management Limited is the non-operating holding company of Platinum Investment Management Limited (PIML) and PIML, which trades as Platinum Asset Management and operates a funds management business.

FUM for January 2020

The company experienced net outflows of about $254 million in the month of January 2020, which included net outflows of about $176 million from Platinum Trust Funds. At the end of the month, FUM was $24.649 billion.

FUM Down by 4% on June 2018

PTM reported FUM of $24.8 billion for June 2019, down by 4% on June 2018. There were net outflows of $246 million led by Platinum Trust Funds and were partially offset by net inflows of $201 million in the Platinum Quoted Managed Funds’

• The company declared fully franked final dividend of 14 cents per share, taking the full year to 27 cents per share;
• The PAT to shareholders was down by 17% and earnings per share down 16% on FY18, due to lower performance fees and reduced gains on seed investments.

Outlook for FY20

• The company’s FUM on 31^st October 2019 stood at $24.6 billion, down by 0.7% on 30^th June 2019;
• The company offers a highly differentiated product and maintains a strong position in the Australian retail market;
• In the coming future the company will focus on delivering strong long-term returns for clients and shareholders.

Stock Performance

The stock of PTM is trading at $4.775 per share on 11^th February 2020 (AEDT 11:24 AM), up by 0.105% from its previous closing price. The stock has a market capitalisation of $2.8 billion as on 11^th February 2020 with an annual dividend yield of 5.59%. The total outstanding shares of the company stood at 586.68 million, and its 52-week low and high are $3.660 and $5.680, respectively. The stock has given a total return of 9.40% and 9.40% in the time period of 3 months and 6 months, respectively.

FlexiGroup Limited

FlexiGroup Limited (ASX: FXL) offers a varied range of financing solutions to businesses and customers via a plethora of business and retail partners.

FlexiGroup Launches bundll

The company has launched a world first BNPL product that can truly be used everywhere. bundll represents a fresh and revamped segment in the BNPL sector with transactions not being impeded by the lack of merchant integration. It is now available to download from the App Store and Google Play Store.

• bundll is the only BNPL product that can facilitate multiple payments up to $1,000 at any merchant that accepts Mastercard transactions, supporting customers in their everyday spending;
• The company has created a product that will allow customers to Buy EVERYWHERE and Pay Later through a strategic partnership with Mastercard;
• bundll extends the boundary for BNPL spend for everyday items, with interest free purchases in types normally extended to debit card spends such as petrol and groceries.

The company will release its result for the six months ended 31 December 2019 on 25^th February 2020.

The company announced the pricing of $265m asset-backed security (ABS) structure. This has an underlying pool of consumer receivables which are unsecured and have originated in Australia under its rebranded BNPL offering-humm.

The company is a frequent issuer of ABS and has been implementing securitisations of its BNPL receivables underneath the Flexi ABS programme ever since 2011. After relaunching it in April 2019, FXL has witnessed great drive across humm’s target verticals with overall retail partners increasing to more than 18,000 and strong volume increase all over these key verticals. In FY20, it has aggregated over 132,000 additional customers to the humm platform and witnessed a 35% rise in the amount of transactions vs. pcp.

Stock Performance

The stock of FXL is trading at $1.840 per share on 11^th February 2020 (AEDT 11:39AM), down 0.541% from its previous closing price. The stock has a market capitalisation of $729.62 million as on 11^th February 2020. The total outstanding shares of the company stood at 394.39 million, and its 52-week low and high are $1.070 and $2.710, respectively. The stock has given a total return of -11.90% and 16.35% in the time period of 3 months and 6 months, respectively.

Sezzle Inc. (ASX: SZL)

Sezzle is a fast-growing financial technology company whose objective is to financially enable the next group of customers who have evolved. The company’s payment platform improves purchasing ability for customers by presenting interest-free instalment options at online stores. This rise in purchasing power of customers starts to increase sales and bag sizes for greater than 10,000 Active Merchants that extend the company’s footprint in the United States and Canada to more than 1,000,000 Active Customers.

Sezzle Crosses 1 Million Active Customers

The company has passed the one million mark for Active Customers. Since launch in the US in 2016, the company’s payments platform has experienced tremendous growth, as both consumers and merchants have flocked to Sezzle as their favoured BNPL payments solution provider.

Sezzle Reports Strong Gains Across Key Metrics

The company has posted strong gains across all key operational metrics in the three months ended 31 December 2019 (4Q FY2019). Key highlights:

• Underlying Merchant Sales (UMS) totalled US$105.1 million, up 52.6% from US$68.8 million in the September Quarter, bringing annualized UMS to over US$420 million;
• The number of consumers using Sezzle made impressive gains with Active Customers growing to 914,886 at 31 December 2019 compared to 644,509 at 30 September 2019, an increase of 42.0%;
• The number of Active Merchants grew to 10,010 at 31 December 2019 compared to 7,507 at 30 September 2019, an increase of 33.3%;
• Net Transactions Losses (NTL) and Net Transaction Margin (NTM) continue to maintain positive trends.

Source: Company Reports

Stock Performance

The stock of SZL is trading at $1.835 per share on 11^th February 2020 (AEDT 11:39 AM), down 0.542% from its previous closing price. The stock has a market capitalisation of $328.49 million as on 11^th February 2020. The total outstanding shares of the company stood at 178.05 million, and its 52-week low and high are $1.170 and $2.860, respectively. The stock has given a total return of -19.78% and -18.36% in the time period of 3 months and 6 months, respectively.

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