Join our community of smart investors

AJ Bell finance chief tops up holding

The purchase followed a bullish update from the investment platform provider
AJ Bell finance chief tops up holding
  • Finance director Roger Stott increased his beneficial ownership via a £423,000 purchase
  • The group raised revenue guidance for this year at the end of March

Amid the surge in trading activity among retail investors, it is unsurprising that investment platform providers such as AJ Bell (AJB) have been viewed bullishly. Indeed, shares in the group have risen by almost two-thirds over the last 12 months and sit 25 per cent above pre-lockdown level at the end of February. 

Investors may have further cause for confidence in the group’s prospects. Group finance director Roger Stott and his wife, Julie Stott, have bought combined shares worth around £423,000, at 423p apiece. 

The purchases came just a day after the investment platform provider revealed that revenues for the year to September would be £6m above market consensus expectations of £136m, thanks to elevated levels of dealing activity and the strong rate of gaining new customers during the first half of its financial year. 

That is despite the fact that dealing activity is expected to moderate during the latter half of the year. Consensus pre-tax profit forecasts for 2021 have been upgraded by almost a fifth since the group announced 2020 full-year results at the start of December, standing at £51.6m, according to FactSet. Profit growth is expected to ease to just 2 per cent in 2022, based upon consensus forecasts.

At 444p, the shares are valued at a pricey 45 times forecast earnings. That is a sizeable premium to sector leader Hargreaves Lansdown (HL.), which trades at a multiple of 28. The longer-term shift towards investment platforms by a growing number of savers may prove supportive of revenue growth, but that is adequately accounted for by the market’s valuation. Hold.

Last IC view: Hold, 441.5p, 6 Jan 2021

Buys    
CompanyDirector/PDMRDatePrice (p)Aggregate value (£)
AJ BellRoger Stott (PDMR)30 Mar 2021423423,000
Funding Circle HoldingsSamir Desai (ce)29 Mar 2021182100,869
HalfordsThomas Singer29 Mar 202137237,200
IMIAjai Puri30 Mar 20211,31939,563
Motorpoint GroupAdele Cooper31 Mar 202126034,650
One Heritage Group Martin Crews (PDMR)26 Mar 20213278,266
VPC Specialty Lending Inv'sGraeme Proudfoot 26 Mar 20218466,936
Sells    
CompanyDirector/PDMRDatePrice (p)Aggregate value (£)
ActiveOpsSpencer O'Leary (PDMR)29 Mar 2021187335,700
AnparioRichard Edwards (ce)29 Mar 2021580725,000
EssentraRichard Cammish (PDMR)03 Mar 202129775,006
Gym GroupJohn Treharne29 Mar 20212521,258,750
Gym GroupPaul Gilbert29 Mar 2021252514,683
IWGFrançois Pauly30 Mar 2021340170,101
Polar Capital HoldingBrian Ashford-Russell31 Mar 2021696445,148
TandemSteve Grant29 Mar 2021626250,300