Don't get me wrong; it is no slam dunk investment, and requires a bit of buy-in to the new management's "trust-us" mantra.
But what I think is plain crazy talk is that of "survivor-ship".
With the life business (and its contingent liabilities) now jettisoned and with the balance sheet now re-capitalised, AMP is today an eminently solvent business.
I think that, going forward, the base case scenario is that the business improves (how can it not, given its current parlous state of performance?).
The only question is, at what rate does it improve?
But even that is a bit moot because, on a P/E multiple of just 14x for FY2020 (being, surely, a year that is close to the bottom), the stock price is not factoring in any improvement at all.
Admittedly, the precise path to redemption (even partial redemption) is not very clear to this observer. However, I'm not overly smart so I have to sometimes simplify things for myself and look at them from afar so that the trees don't get in the way of my view of the forest.
And in these from-afar, simplistic terms, when I look at AMP, what I see is a $6.0bn-odd asset management company that has a banking business - which generates $140m to $150m in Operating Earnings - hanging off it.
Capitalising the earnings of that banking business at a conservative 10x multiple, so an implied valuation of $1.4bn to $1.5bn, and netting that off AMP's current $6.2bn market value, yields an implied valuation for the pure Asset Management side of AMP at around $4.8bn.
And, from this observer's vantage point, $4.8bn "feels" intuitively like a very small number for an enterprise that has stewardship of $340 billion of asset under management/administration/supervision (FUM/A/S)
For context, besides the equally-bombed out IFL which, like AMP, was one of those evil monster to emerge from last year's Royal Commission, AMP's market cap relative to its FUM/A/S, is a fraction of that metric for other asset managers/administrators in financial services sector.
Of course, this is a very crude assessment and is therefore not presented as being the definitive argument why AMP is a buy. Because there are some very real reasons why AMP is capitalised as low as it is, relative to its FUM/A/S.
The most obvious reason is that AMP doesn't generate very much in the way of profits per unit of assets that it manages.
In terms of Operating Profit per unit of FUM/A/S, AMP generates less than half that of IFL, and less than one-fifth the level of the average of the rest of the companies in that sample.
Again, it warrants stressing that this sort of rudimentary benchmarking exercise is intended to be indicative, not prescriptive. But what it indicates to this observer is that - even if AMP's new management get things only s little bit right - there is ample headroom in which to improve some of the key value drivers of the business.
Viewed another way, in FY2019, AMP's P&L had almost $1.5bn of compressible costs embedded within it (with, maybe, $100m of that having been subsequently disgorged with the offloading of the Life business).
And $1.4bn is a big number in the context of a business whose Net Profit After Tax is equivalent to only around one-third of that cost base.
Which means that, all else being equal, for every 5% reduction in the company's cost base, NPAT increases by 10%. The leverage is clearly significant if they get it half right.
Even if they manage to hang on to just half of the $300m targeted cost reductions, that would imply, off today's $500m profit base, a business earning NPAT in excess of $600m in two-and-a-half years' time.
An ensuing re-rating of the valuation multiple, from the current 14x P/E to a still-modest, and discount-to-market, multiple of 15x, would see the company being valued in the vicinity of $9.0 bn. Compared to its $6.2bn value today.
Like I say, it isn't a slam dunk because of the execution risks, but one thing is for sure, there is clear evidence of value on offer.
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AMP Price at posting:
$1.84 Sentiment: Buy Disclosure: Held
(20min delay)