40. Alpha Financial Markets Consulting
It is the nature of consulting companies that their work arrives either as a trickle or a flood. For Alpha Financial Markets Consulting (AFM), the summer quarter was a particularly difficult time. That could be put down to executives who might have commissioned them spending time at the beach. Doing so would hide the reality that the company is experiencing the pitfalls of working with a sector – asset management – that finds consultancy fees an easy expense to cut. The knock-on effect of this is that AFM’s revenues will in theory be weighted heavily towards the second half of the year. Management still sounds optimistic that it can meet its financial targets.
This is partly why analysts haven’t, so far, changed their 2023 forecasts: consensus puts earnings per share at 26.8p, or a price to earnings ratio of 12. By some measures that is a 50 per cent discount to some of its consulting peers. AFM is suffering because its customers are suffering, but any change will see positive operational gearing come into play. Buy. JH