Oh, and for an element of balance, while I am not concerned about the current developments and their financial impacts, there is a broader structural trend within AUB's financial pedigree to which I am sensitised, namely that of the rate of expansion in the carrying value of goodwill (running at a CAGR of ~15%pa over the past decade) compared to the growth in operating earnings (~9%pa CAGR)).
The result has been declining ROE over time, to wit:
...which has been met with commensurate reduction in Price-to-Book:
This metric makes me scrutinise, even closer than usual, the acquisitions the company is making, because it appears that either the quality of the acquisitions that made is deteriorating over time, or the acquisition multiple discipline is slipping. That, or worse, AUB's core business is going backwards and the acquisition strategy is masking this.
If there was one concern shareholders might raise with AUB's management, it should be this one.
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Ann: Investor Presentation and Conference Call Details, page-13
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$31.38 |
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Mkt cap ! $3.629B | |||
| Open | High | Low | Value | Volume |
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