AJ Bell (AJB) made its introduction to the London Stock Exchange this morning and it promises to be a great Friday for those that got in on the IPO, with shares soaring almost +35% within the first two hours of trading. The tips have already started rolling in; Miles Costello (The Times) recommends buying as “the shares weren’t aggressively prices, and offer considerable growth and yield potential”. In this week’s article, we take a look back at tipster and broker sentiment towards three other key IPOs over the last six months: Amigo Holdings (AMGO), Aston Martin (AML) and Quilter (QLT).
Amigo Holdings (AMGO)
Tip Sentiment (Since Listing): 40.00% Buy, 60.00% Hold, 0.00% Sell;
Shares in high-interest lender Amigo Holdings are down over 7% since listing five months ago, and a majority of broker tips since have taken a neutral stance. Numis however remain positive about the lenders prospects and recently reiterated a buy rating, with an accompanying target price of 330p (representing an increase of 30% on the current trading price).
RBC Capital remain positive, but yesterday cut its price target to 345p from 350p. Both Shore Capital and Berenberg meanwhile have given a more cautious ‘hold’ rating on the shares. Interesting, tip activity on Amigo has come entirely from brokers, with no tips tracked by professional tipsters on the firm since listing.
Aston Martin Lagonda (AML)
Tip Sentiment (Since Listing): 60.00% Buy, 20.00% Hold, 20.00% Sell
Tipsters are divided about the future outlook for Aston Martin, whose shares currently trade at a level 30% lower than the IPO price – although there is consensus that holding shares in the luxury sports car manufacturer is not for the faint-hearted. Richard Evans (The Telegraph – Questor) considers the shares to be a buy for investors willing to tolerate a high level of risk, noting that “with a lot riding on one new model the stock is probably riskier than most but for risk-tolerant readers Aston Martin is worth a punt”.
Miles Costello (The Times) disagrees and advises investors to “take a good look under the bonnet” and avoid the shares, considering its valuation to be “premium” for an “ambitious business that is not without risks”. Deutsche Bank and Goldman Sachs have both stamped buy ratings on the stock, while HSBC offer a hold rating with an accompanying target price of £15.50.
Quilter (QLT)
Tip Sentiment (Since Listing): 90.00% Buy, 10.00% Hold, 0.00% Sell
Quilter has been one of the more active recent IPOs in terms of tips tracked on Stockomendation, and tip sentiment is almost exclusive bullish. Though shares have dropped since listing, both brokers and tipsters appear to be of the opinion that the future outlook is bright for financial services firm Quilter – the rebranded wealth management business of Old Mutual. Brokers UBS, Goldman Sachs recently published buy ratings to the shares, with UBS assigning an accompanying target price of £1.75.
According to Rupert Hargreaves (The Motley Fool), Quilter “came to the market with a relatively modest valuation” offering an expected dividend yield of 4.3% and a forward P/E of 10.7, and this – coupled with the company already having “made a name for itself” – forms the basis of the tipster’s buy recommendation. Shortly after listing, Robin Pagnamenta (The Times) considered the firm to be “a serious new player in a growth business, with new-found flexibility to do deals and conduct business on its own terms”. Numis offer the only non-positive recommendation, rating the firm as a ‘hold’ in October.
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Disclaimer: The contents of this article should not be considered financial advice. All information displayed as at 6th December 2018.
