Jupiter Fund Management Plc

Jupiter Fund Management Plc (JUP) is a financial service provider that offers management of medium and long-term investments. The company provides management of equity investments for retail, institutional and private client investors. As on June 21, 2010, shares of the Jupiter Fund Management Plc were admitted to the main market of the London Stock Exchange.
 
Trading Update: Q3 FY19

Source: Company filing

As on October 11, 2019, the group reported its trading update for the third quarter ended on 30, September 2019, During the quarter under consideration, group’s net outflow in the quarter stood at £1.3bn and Assets Under Management at the end of the third quarter were at £45.1bn and slumped by £0.80bn on quarter-on-quarter basis. Net mutual fund outflow stood at £1.0bn, out of which £1.1bn outflow recorded from European Growth Strategy. As announced earlier on July 01, 2019, Alexander Darwall has shown his intention to set up an independent firm and now intends to step down from Jupiter in mid-November.

Stock Performance
 
Daily Price Chart (as on October 11, 2019), before the market close. (Source: Thomson Reuters)

At the time of writing (before the market close, at 01:20 PM GMT), shares of the JUP were quoting at GBX 331.6 and 13.60 points or 4.16% higher against the previous closing level. In the year-ago period, its shares have registered a 52w high of GBX 435.0 and a 52w low of GBX 265.54, respectively. Since the last three months, shares of the JUP were down trending and gave up more than 20% in the past three years and plummeted approximately 14% in the past one month.

Valuation Methodology


Conclusion
The company faces several risks such as Failure to deliver strategy; Ability to attract and retain critical staff; Ineffective product, client and geographic diversification; Sustained market decline; Challenges presented by Brexit; Operational control environment; Failure of a critical outsource partner; and Cybercrime.

Also, the group’s performance in the third quarter of FY19 was below the expectation, ongoing outflow from the mutual funds would continue in the remaining period of the FY19 amid jolted investors sentiments and challenging macro situation in the UK, and global slowdown because of heightened trade spat between two large economies is also adding fuel to the fear.

Therefore, based on the above rationale and valuation done using the above methodology, we have given an “Avoid” recommendation at the current market price of GBX 331.6 (as on October 11, 2019, before the market close).

Cairn Energy Plc

Cairn Energy Plc is a UK based independent oil and gas production and exploration company. The company has conducted activities related to exploration, discovery, development and production of oil and gas in multiple locations worldwide. The company holds an experience of over 20 years as an operator and a partner in oil and gas lifecycle stages. The company was headquartered at Edinburgh with offices located in the region of Norway, Mexico, Senegal and London.

October 11, 2019: Iran Oil Tanker Hit by Missiles in the Red Sea. 

An Iranian-owned oil tanker was hit by two missiles in the Red Sea off Saudi Arabia's coast on Friday, Iran's state television reported, quoting the National Iranian Oil Company (NIOC) which owns the vessel.The incident, which caused an oil spill and a jump of as much as 2.6% in crude prices, comes weeks after a devastating attack on major Saudi oil facilities that the kingdom blamed on Iran. Tensions have been rising steadily in the region since U.S. President Donald Trump unilaterally withdrew from an international nuclear deal with Tehran and imposed harsh sanctions on the Islamic Republic.

Interim Results: H1 FY19

Source: Company filing.

During the first half of FY19, the group’s revenue surged to $270.3 mn as against $182.4 mn in H1 FY18. The increase in revenue was driven by an increase in the sale of oil for the period. In H1 FY19, gross profit stood at $113.9 mn versus $38.7 mn in H1 FY18. The company reported an operating profit of $60.3 mn in H1 FY19 against an operating loss of $34.5 mn in H1 FY18. The company’s reported PBT (Profit before tax) from continuing operations stood at $43.4 mn in H1 FY19 against an LBT (loss before tax) from continuing operations of $602.9 mn in H1 FY18. The company’s reported PAT (Profit after tax) attributable to shareholders stood at $66.5 mn in H1 FY19 against LAT (loss after-tax) of $500.5 mn in H1 FY18. The company’s basic earnings per share for H1 FY19 was at 11.44 cents versus a basic loss per share of 86.20 cents in H1 FY18. The company’s diluted earnings per share for H1 FY19 was at 11.35 cents versus a diluted loss per share of 86.20 cents in H1 FY18.

Stock Performance
 
Daily Price Chart (as on October 11, 2019), before the market close. (Source: Thomson Reuters).

At the time of writing (before the market close, at 02:11 PM GMT), shares of the CNE were trading at GBX 195.5 and added 4.5% against the previous closing level. In the year-ago period, its shares have registered a 52w high of GBX 226.40 and a 52w low of GBX 138.0, respectively.

Conclusion
Since, attack against the Saudi Arabia’s oil facilities launched by one Iranian terrorist outfit, oil prices witnessing large swings in the commodity market, initially it benefited oil exploring and production companies as Brent Crude Oil prices surged as high as $71.96/bbl, but after Saudi Arabia announced that it had recovered its total capacity back to the previous level, oil started witnessed substantial correction as well. However, today's (October 11, 2019) incident in which Iran Oil Tanker Hit by Missiles in the Red Sea has against sent Oil Prices approximately 1.2% higher at $60.25/bbl, which is helping oil production company’s stock to move up further.
Organization of Petroleum Exporting Countries (OPEC) indicated that expected supply from non-OPEC sources to accelerate slightly less than as previously thought, which sent oil prices higher on October 11, 2019. Non-OPEC supply is expected to grow 2.20 million barrels per day (bpd), down from 2.25 million in OPEC’s September report. Trimmed forecasts for global demand growth expected this year (as per OPEC).

Also, CNE shares were quoting well above its long-term support level of 20day Simple Moving Average Price, a bullish technical measure and 14-day RSI hovering in a neutral zone and strengthening the upside movement in the stock price as well.

Therefore, based on the recent positive development for the Upstream Energy Companies, we have given a “Hold” recommendation at the closing price of GBX 187.0 (as on October 10, 2019).

Disclaimer

PLEASE BE ADVISED THAT YOUR CONTINUED USE OF THIS SITE OR THE INFORMATION PROVIDED HEREIN SHALL INDICATE YOUR CONSENT AND AGREEMENT TO THESE TERMS.
References to ‘Kalkine’, ‘we’, ‘our’ and ‘us’ refer to Kalkine Limited.
This website is a service of Kalkine Limited. Kalkine Limited is a private limited company, incorporated in England and Wales with registration number 07903332.
The article has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. Kalkine is not responsible for material posted on this website and does not guarantee the content, accuracy, or use of the content in this site. No advice or information, whether oral or written, obtained by you from Kalkine or through or from the service shall create any warranty not expressly stated.
Kalkine do not offer financial advice based upon your personal financial situation or goals, and we shall NOT be held liable for any investment or trading losses you may incur by using the opinions expressed in our publications, market updates, news alerts and corporate profiles. Kalkine does not in any way endorse or recommend individuals, products or services that may be discussed on this site. You should discuss your portfolios and the risk tolerance level appropriate for your personal financial situation, with a professional licensed financial planner and adviser.