Hi All
With all of the noise around GQG valuation changing so frequently, I wanted to take a look at what I see are the business fundamentals of the GQG - revenue based on average FUM growth, historical returns, average increase from half year to full year, net margins and use these numbers to extrapolate to land on a forecast range for EPS in AUD this February.
Summary - why GQG is a bargain at $1.80
The summary version of the below detail is EPS in AUD will be between $0.21 (PE Ratio of 8.66) and $0.24 (PE Ratio of 7.50).
The main issue with extrapolating as per below detail, it doesn't take into account potential cost increases in the second half of the year.
GQG typically pay out 90% of EPS in dividends. Based on $1.80 share price and dividend range between $0.21 to $0.24 forecast is $0.189 (10.5% div yld) to $0.216 (12% div yld) pre-tax. After 15% tax; $0.16 (8.8% div yld) to $0.1836 (10.2% div yld).
Detail - why GQG is a bargain at $1.80To begin with, here is the Average FUM for each calendar year with Half Year and Full Year Revenue, Net Profit, Net Margin and EPS/PE ratio based on $1.80 per share:
The one key point here is I have added a Revenue multiple between the half year and full year Revenues and Net Profit.
In the next table, I have used the lower end of the multiples to forecast the full year revenues and net profit - i.e. 1.962 x 2024 half year revenue = FUll Year Revenue. These are marked in grey boxes:
In the next table, I have used the lower end of the multiples to forecast the full year revenues and net profit - i.e. 2.18 x 2024 half year revenue = FUll Year Revenue. These are marked in grey boxes:
Feedback would be greatly appreciated.
Best of Luck
Lost
Acknowledgement/s; thanks for the chat Greg, sometimes markets and us investors forget to look at what the business is doing.
(20min delay)