Azzet reports on two ASX financial stocks with notable trading updates today
GQG rises after disclosing strong fund inflow
Shares in GQG Partners (ASX: GQG) were up around 3.3% in earnings morning trading after the global boutique asset management firm reported a 50% jump in net operating income in 2024, after attracting US$20.2 billion for the year ended 31 December, 2024.
Despite GQG’s major exposure to the Adani Group, a year of solid inflows saw the ASX-listed Fort Lauderdale-based fund manager’s funds under management (FUM) reach US$153 billion in December 2024, up from 26.9% the previous year.
In light of allegations that Adani participated in large-scale fraud and stock manipulation, GQG is currently reviewing the US$1.87 billion worth of shares it bought in numerous Adani group companies last year.
The increase in FUM led to net revenue growth of 46.9% to US$760.4 million during 2024.
Fund inflows from Australian investors double
After doubling the amount of money raised from Australian investors from US$611 million in 2023 to $1.3 billion, the fund now manages $4.8 billion of assets in Australia.
Tim Carver, CEO GQG Partners attributed GQG’s ability to consistently outperform its benchmarks to its investment performance over the long-term.
Carver also reminded investors that more than 96% of the company’s revenues in 2024 were derived from asset-based fees, which he expects to exhibit more stability in periods of market volatility.
“We continue to offer what we believe are very attractive fees relative to our competition. Our weighted average management fee for the 12 months ended 31 December 2024 was 49.6 bps, which we believe to be very competitive,” said Carver.
“As a result, we may be less likely to face margin pressure in the future relative to peers with higher average management fees.”
Other key numbers highlighted today include:
January 2025 net flows of US$1.7 billion.
Net operating income of US$577.9 million, up 50.4%.
Diluted earnings per share increased 52.3%.
4Q 2024 final dividend of US$0.0378 per share.
Looking forward
While Carver sees strength in the key measures of health for the business, he told investors that volatility in markets, changes in asset allocation by investors, and the overall geopolitical environment, may result in headwinds.
In light of those headwinds, Macquarie expects net flows for 2H25 of US$2 billion, which infers slightly lower net flows per month than previous years.
Meanwhile, with fund inflows expected to be more volatile in 2025, Morgans has lowered its earnings per share (EPS) forecasts by 4% and 4.5% for 2025 and 2026 on lower FUM.
GQG has a market cap of $7.2 billion making it an ASX100 stock; the share price is up 17% in one year and up 18.8% year to date.
GQG shares appear to be in a long-term bearish trend confirmed by a falling 200-day moving average.
Consensus is Strong Buy.
WAM up on strong portfolio outperformance
Despite what’s been a challenging trading environment, particularly for small-cap companies, shares in WAM Capital (ASX: WAM) were up around 1.5% in afternoon trading after the listed investment company (LIC) revealed that its portfolio's outperformance against key market indices has resulted in increased profits.
In the six months to 31 December 2024, LIC's investment portfolio delivered a 14.9% return, outperforming the S&P/ASX All Ordinaries Accumulation Index by 8.0% and the S&P/ASX Small Ordinaries Accumulation Index by 9.4%.
Over the 2024 calendar year, the portfolio delivered 30.2% return, compared to 18.8% on the All Ordinaries and 21.8% return on the Small Ordinaries Index.
Based on portfolio outperformance, LIC delivered a 40.3% jump in profit ($208.7 million), and a 40.6% increase in operating profit ($149.8 million).
The Sydney-based company maintained its 7.75 cents per share partially franked interim dividend which represents an annualised yield of 9.6%.
Lead portfolio manager Oscar Oberg notes a favourable interest rate environment positions the portfolio well to capture opportunities in 2025.
Other key numbers released today include:
Total shareholder return for the six months to 31 December 2024 was 15.2%.
Share price discount to NTA reduced from 4.6% at 30 June 2024 to 1.4% at 31 December 2024.
24.9 cents per share in its profits reserve available for future dividends.
At 31 December 2024, the company’s top five stock holdings were: TUA Ltd (ASX: TUA) 4.2%, G8 Education Limited (ASX: GEM) 2.9%, Judo Capital Holdings Limited (ASX: JDO) 2.6%, Service Stream Limited (ASX: SSM) 2.3%, Maas Group Holdings Limited (ASX: MGH) 1.9%.
WAM Capital has a market cap of $1.8 billion, making it an ASX300 stock; the share price is up 8% over one year and 4.7% year to date.
The stock is still trading 31% lower than its five-year high of $2.40.
WAM is in a strong bullish trend confirmed by multiple indicators.
Consensus does not cover this stock.
This article does not constitute financial product advice. You should consider independent advice before making financial decisions.
