Financial advisor and asset manager Frenkel Topping Group (LSE: FEN) found itself still on the defensive in Tuesday business, the stock descending an extra 3% to trade at fresh nine-week lows of 57p per share.
Investors reacted to the news that Frenkel has, following the completion of a strategic review, decided to withdraw plans to put itself up for sale.
The business — which provides asset protection for vulnerable clients — said that having launched a review at the start of April, it has “decided that it is in the best interest of shareholders, employees and clients to continue as an independent company, pursuing its existing business plan.”
In particular, Frenkel noted the improved prospects brought about by the proposed changes to the Ogden Discount Rate, amendments that it says “will materially alter the landscape of the industry.”
Frenkel noted that “the effects of the Ogden Review are now starting to translate into higher levels of damages available to our clients and this should accelerate the growth of AUM for the group.”
As a consequence Frenkel advised that it “is not in active discussions with any third party in relation to a corporate transaction, such as a merger with or sale of the company and as such the Formal Sale Process has now been terminated.”
On the right track
And today’s positive half-year numbers go some way to vindicating Frankel’s decision to keep going it alone.
Frenkel advised that it expects profit from operations for the six months to June to have rocketed to £1.2m from £300,000 in the same period last year, while revenues are also anticipated to have increased to £3.7m from £2.8m previously.
Furthermore, assets under management are expected to have clocked in at £770m, up from £745m last year. It has designs on hitting the magic £1bn marker on an organic basis.
The City certainly believes it is a hot growth stock to watch, and anticipates earnings expansion of 302% and 37% in 2017 and 2018 respectively. These projections make the Manchester business very attractive value for money, a forward P/E ratio of 14.6 times falling below the widely-considered value watermark of 15 times.
And a sub-1 prospective PEG reading of 0.1 underlines Frenkel’s brilliant value relative to its growth prospects.
Catwalk star
Fashion favourite Supergroup (LSE: SGP) may not be packing the same sort of value as Frenkel, but I reckon those seeking excellent long-term growth need to check out the London label.
The number crunchers have pencilled in earnings expansion of 13% in the years to April 2018 and 2019 respectively, following on from an expected 17% rise last year. And these punchy projections come as no surprise given the exceptional progress the Superdry owner continues to make across the globe.
The business saw revenues explode 20.6% in fiscal 2017, to £501.6m, underlining the success of its store rollout programme and improvements to its e-commerce proposition. So while Supergroup trades on a slightly-toppy forward P/E ratio of 16.4 times, I reckon this remains great value given the company’s stunning top-line momentum.
