The results were disappointing. They did not surprise everyone....

The results were disappointing. They did not surprise everyone. But let’s look at some facts or what some may consider facts or at least reasonable opinion.

1. There is not much good in the results…no matter how much you spin them. Margins, market share, cash flows, cost reduction, and profit poor.
2. But this just shows how long it takes to fix the problems and change a business. People have been unrealistic how fast the business could turn around.
3. The NTA is decent.
4. The potential break up value of the business is decent.
5. Both of these suggest a higher SP for AMP
6. The adviser CA weighs on the business but should not be too material. A few hundred million.
7. It is fair to accept is was oversold on the result by people who had unrealistic expectations of the results. To what extent the spin provided by amp is at fault, I am unsure.
8. To some extent the SP decline is a loss in confidence in the board and management team. And yes, I have called out their inability for a while. I just don’t think they are up to the job while others do. Evidence so far supports my view.
9. The calls by fund managers that amp was worth more may have been based on genuine belief, but we must remember, they were already substantial holders and needed the SP to go up. They may be right and it is worth more. I think it is worth more. But their motivations were about the performance of their funds.
10. I called a floor on the amp price last year at around $1.15, and then it went down. So I was wrong. And then it went up to $1.40 or so. I have also said it had a value of $1.60 or so. This is based on break up. I lost confidence in this happening so I changed my sentiment from buy to hold. So while I don’t claim to know about SP movements, I have some idea of the market value of AMP over time, as seen by the market.
11. I have been called a downramper etc. As I have been critical of those suggesting an SP of $2 up to $5 as it is about the profit required to get there. It is about the revenue and the margin on the business required to get there. I have been critical of the bank value as it is subscale. It now produces $100m npat as it is taking on it’s true expenses. It may be growing in size but it is declining in profit. North has the same problem. Buying scale in North by buying Panorama will just add to the problem.
12. The SP for AMP has now been flat or down for a long time. There is a reason. It is down from when Alexis took over. It is down 90 cents or 45% from 3 years ago. It has not been run well would be a reasonable conclusion. Yet some praise those running the place.

These are facts or well based opinions or observations. I still hope to exit amp at a higher price.