Was wondering who was buying at the lows the last few days

Need to do some research and find out why Yarra thinks this is good value especially when one of the directors sold recently and after the last update.

PNI released their financial results for FY22

Net profit after tax (NPAT) attributable to shareholders of $76.4million, up 14%from $67.0million in the prior financial year(FY21)

Performance fees earned by Pinnacle Affiliates, post-tax, contributed $16.6m of Pinnacle’s NPAT in FY22 ($19.5m in FY21)

Fully franked final dividend per share of 17.5 cents(up 3% from the fully franked FY21 final dividend of 17.0cents), taking total fully franked dividends for the financial year to 35.0 cents(up 22% from the fully franked FY21 total dividends of 28.7cents)

Results must have been better than expected - price was up 15% at one stage. Looks like short covering due to many brokers with lower targets than current price.

Been a good ride buying at the bottom around $8 at the price shakeout when the performance update was announced.

Held

Pinnacle updated the market this morning confirming their share of performance fees post tax was $16.4m from 10 x affiliates this year (unaudited). This is down from $19.5m FY21 over 7 x affiliates.

I think this is a pretty good result considering the FY we have had, it was better than I expected, and i am optimistic about their full year results. My thought is this reinforces the quality of their business model. Lackluster sharemarket performance is cushioned by their ability to onboard affiliates, which when the sharemarket turns positive should create great leverage in their results.

See announcement here

PNI have largely flown under the radar over the last few years as they have quietly grown into a funds management bohemeth.

Their model is slightly different to many of their fund manager peers (eg Magellan, Platinum). Rather than build their own investment management team, they take equity stakes in up and coming fund managers, take control of operations and distribution and largely leave the fund manager to do what they do best (make money investing) while taking away the things that are distractions (distribution, operations).

They generally take on in the vicinity of 40-50% equity in the managers and they've made a number of good bets with their affiliate fund managers, with the likes of Hyperion, Plato, Antipodes and Solaris all in their stable.

By having such a large stable of managers under their span, much of the risk of investing in fund managers is taken away. Risks of managers leaving or periods of underperformance are much lower as no single manager makes up a large portion of their total portfolio.

Profits were up over 100% in latest half year statement. FUA is up, and with cash rates where they are, demand to invest in equity funds isn't going anywhere.

Of course fund managers in the short term at least are a leverage play on market sentiment, so expect a wild wide as markets gyrate.