Coronation (CML) is one of South Africa's largest asset managers and the only one listed on the JSE. Founded in 1993, the company experienced significant growth until 2015. At that point, the founding CEO resigned and was replaced by Adrian Pillay. Despite Pillay's qualifications, the company has faced challenges under his leadership, particularly due to significant losses from investments in African Bank and Steinhoff. These missteps have led to a re-evaluation of Coronation's ability to select winning investments, resulting in an outflow of institutional funds. The fund management business relies heavily on confidence, and these events have shaken the trust that institutional fund managers place in Coronation.
On 8th February 2023, Coronation announced it had lost a SARS appeal, which may result in the suspension of its dividend, causing the share price to drop sharply. However, in its results for the six months ending on 31st March 2024, the company reported a revenue increase of 4.3% and headline earnings per share (HEPS) of 200.5c, compared with 6.2c in the previous period. Assets under management (AUM) grew by 5% to R631bn. The company noted, "Net outflows for the period were in line with our expectations at 4% of average AUM. This is largely due to the weak SA savings industry, to which Coronation is significantly exposed. It also reflects the experience of the broader industry, as active asset managers around the world experience persistent net outflows."
From a technical perspective, Coronation's shares experienced strong growth from 2008 until they peaked at R115 per share on 30th December 2014. Under the new management, the share value fell to a low of 2541c during the COVID-19 outbreak. A long-term downward trendline was observed, with a potential upside break appearing imminent. The share was added to our Winning Shares List (WSL) on 11th May 2024 at 3281c. Since then, it has risen to 3415c and appears poised for further increases.
On 8th February 2023, Coronation announced it had lost a SARS appeal, which may result in the suspension of its dividend, causing the share price to drop sharply. However, in its results for the six months ending on 31st March 2024, the company reported a revenue increase of 4.3% and headline earnings per share (HEPS) of 200.5c, compared with 6.2c in the previous period. Assets under management (AUM) grew by 5% to R631bn. The company noted, "Net outflows for the period were in line with our expectations at 4% of average AUM. This is largely due to the weak SA savings industry, to which Coronation is significantly exposed. It also reflects the experience of the broader industry, as active asset managers around the world experience persistent net outflows."
From a technical perspective, Coronation's shares experienced strong growth from 2008 until they peaked at R115 per share on 30th December 2014. Under the new management, the share value fell to a low of 2541c during the COVID-19 outbreak. A long-term downward trendline was observed, with a potential upside break appearing imminent. The share was added to our Winning Shares List (WSL) on 11th May 2024 at 3281c. Since then, it has risen to 3415c and appears poised for further increases.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.