Is it time to buy, page-43

AMP Capital made 167m NP in the 2018 annual report, the most recent HY showcased a NP of 120m NP - a 27% increase. So lets assume a 212m net profit for AMP Capital & apply a multiple of 10 which I think is conservative, Thats gives 2.1 billion valuation for AMP Capital alone. The current Market cap is 5.3 billion. So just a rough estimation, AMP Capital covers about 40% of the current hare price. Yet the further the price falls, AMP Capital can cover more and more of the current market value.

The price to book ratio for AMP is below 0.75, yet AMP Capital is not a segment of the business that if valued alone, would be below book value. For guidance Platinum is roughly 7, and Magellan around 11. So the Price to book multiple for the rest of the business not including AMP Capital must be dirt cheap (below 0.5 perhaps).

As far as the floor is in this share price, surely the market value of AMP Capital is the absolute floor, which I believe to be roughly 2 billion and this represent 50 cents a share. Now thats still a long way to fall, and if that is the case then it means the rest of the business of worth nothing, which I dont believe to be the case. Who knows if management will turn it around & find salvation. But at these prices, its more than worth a punt. In at 1.67