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Can the Standard Life Aberdeen share price ever return to 445p?

In the last year, the share price of Standard Life Aberdeen (LSE: SLA) has traded as high as 445p. Now though, the asset manager’s stock price is just 328p. Investor sentiment has come under pressure as the company attempts to make its recent merger work, with a loss of clients and a restructuring seeming to be weighing on its valuation.

But looking ahead, the company appears to offer good value for money and investment potential. However, it’s not the only stock which could be worth buying at the present time, with a smaller company releasing positive news on Tuesday.

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Growth opportunity

Watkin Jones (LSE: WJG) is a UK developer and constructor of multi-occupancy property assets, and it released an investor update on Tuesday. It has exchanged contracts to acquire a site in Wembley, benefiting from an existing planning consent for a 599-bed student accommodation scheme. This will be developed by the company for delivery in time for the 2021/22 academic year. The company has also entered into a development agreement with the vendor to deliver 300 build-to-rent apartments in an adjoining site. They are set to be completed in March 2021.

The development potential of the business has increased significantly following the acquisitions. It is expected to post 7% per annum earnings growth over the next two years, which suggests that it is delivering on its strategy. With a price-to-earnings (P/E) ratio of around 14, it seems to offer good value for money which could help to improve its share price performance after a disappointing year. In the last 12 months, the Watkin Jones stock price is down by 10%. But with what seems to be a positive outlook, its total return potential seems to be high.

Improving outlook

The Standard Life share price could also offer an improving future. As mentioned, it has underperformed many of its sector peers in the last year at a time when investor sentiment towards the asset management sector has been generally positive due in part to continued global GDP growth potential.

The company, though, is in the process of restructuring as it seeks to build an improved business model for the long term. For example, it has recently announced the sale of its insurance business, while it seeks to deliver on the synergies which were a major part of its recent merger. And while client losses have been disappointing in recent months, the prospects for the business seem to be improving. It is due to record a rise in earnings of 8% in the next financial year. This suggests that investor sentiment could improve over the medium term.

With a price-to-earnings growth (PEG) ratio of 1.7 and a dividend yield in excess of 7%, Standard Life Aberdeen appears to offer excellent value for money. While its shares have disappointed in the last year, a return to their recent high of 445p seems to be on the cards over the next few years.

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Peter Stephens owns shares of Standard Life Aberdeen. The Motley Fool UK has recommended Standard Life Aberdeen. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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