Where to now for Link, page-15

Morningstar analysis of the stock value below:

Woodford fallout largely immaterial

Narrow-moat financial services administration business, Link Administration Holdings (ASK: LNK) is currently trading at a 40 per cent discount to Morningstar's fair value estimate.

The company was involved in the suspension of UK fund manager Woodford, but Morningstar equity analyst Gareth James says it is not materially affected, maintaining his $8.90 fair value estimate.

"We also think it’s highly unlikely that Link's Australian superannuation business will be affected by the Woodford issues, considering the differences in jurisdiction, regulators, and business attributes," James says.

The stock was trading at $5.30 at the market open on 2 July.

Though there is the potential of the UK financial regulator fining or even banning Link, James believe the affect would not be significant.

Comparable exposure to some similar issues in 2012 and 2017 – which appear to have been even more serious – caused only minimal financial losses for Link.

"These situations appear to have been more serious than the Woodford issue, and a similar financial impact from Woodford would be small relative to Link’s market capitalisation of around $3 billion," James says.