Are investors Moving Away From Investments In HUB24?

  • May 11, 2019 AEST
  • Team Kalkine
Are investors Moving Away From Investments In HUB24?

Established in 2007, HUB24 Limited (ASX: HUB) offers a comprehensive range of investment options for all types of investors including individuals, companies, trusts, associations or self-managed super funds. HUB24 focusses on growth of its wholly owned subsidiaries namely Paragem Pty Ltd, Agility Applications Pty Ltd and ConnectHUB Pty Ltd. The company serves several reputed financial services companies.

The company’s stock has witnessed an overall downtrend this week. On Monday, the stock closed at AUD 15.050, down by 2.336 per cent in comparison to its previous close at AUD 15.410. The stock further fell 3.256 percent on Tuesday dropping to AUD 14.560. Wednesday witnessed the fall in stock price by a significant 6.66 per cent to AUD 13.590. Although, on Thursday, HUB recovered slightly and closed at AUD 13.820 (up 1.7 per cent). The stock settled on Friday (10 May 2019) at AUD 13.700, down by 0.86 per cent relative to last close price.

The company’s stock has generated a YTD return of 19.04 per cent with a negative return of 6.68 per cent over the last month.

HUB24 has been under investors’ radar lately as some market analysts have downgraded the outlook on company’s shares to sell rating. Besides, the company’s Director Bruce Higgins has disposed 200,000 fully paid ordinary shares, effective 6 May 2019 via on-market trade.

However, the company had announced solid quarter results for the period ending 31st March 2019. The company achieved a record quarterly net inflows of $793 million, representing an increase of 33 per cent pcp. Its gross inflows grew by 40.9 per cent to $1.2 billion in comparison to the prior corresponding quarter. The company owes this success to its strong Funds Under Administration (FUA) growth trajectory. In contrast to March 2018 quarter results, the FUA rose by 55.7 per cent in March 2019 quarter to $11.5 billion. The company attained first place for its industry net flows in December quarter and grew fastest in the industry, in percentage terms corresponding to its size.

During the quarter, HUB24 signed 19 new licensee agreements that included agreements with two stockbroking firms, two large advice licensees and a fast-paced advice practice aggregator. In Investment Trends December 2018 Platform Competitive Analysis and Benchmarking Report, the company obtained the first position for its Managed Account Solution and Decision Support Tools.

By utilising its ConnectHUB technology, HUB24 expects to launch the availability of Challenger annuities in the next quarter providing its advisers and clients with an integrated experience.

HUB24 released their financial results for the half year ended 31 December 2018 (1HFY19) on 26th February 2019. The company reported record net inflows and strong profit in 1HFY19. The platform segment revenue increased by 35 per cent to $25.4 million in 1HFY19 in comparison to 1HFY18 figures. The company reported an Underlying Net Profit After Tax of $3.1m and Underlying EBITDA of $6.5m during the period. The Funds Under Administration (FUA) rose by 46 per cent to $10.0 billion relative to 1HFY18 results.

Investors may keep a close watch on the company’s stock after its record growth in the March quarter. It is to be seen whether the company would maintain its momentum of robust quarter results in the next quarter.


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