AMP Limited (ASX: AMP) has just given its FY20 third quarter update. Could AMP shares be a buy for value investors?
AMP’s update
The company said that Australian wealth management (AWM) assets under management (AUM) increased by 0.3% to $121.4 billion thanks to rising investment markets. Average AUM during the quarter went up 2% to $122.1 billion.
However, AWM net cash outflow for the quarter was $1.95 billion, almost the same as FY19 Q3. AMP said that there are underlying signs of underlying improvement after adjusting for $692 million of early release of super payments.
The North platform growth continued with $818 million of net cash inflows, including $196 million from external financial advisers.
AMP Capital experienced net external cash outflows of $1.1 billion, leading to AMP Capital AUM reducing by 0.4% to $189.2 billion.
AMP Bank deposits increased $52 million to $17 billion, but the loan book decreased $303 million to $20.6 billion due to highly competitive market conditions and COVID-19.
Management said that the portfolio review continues to progress in parallel with its transformation strategy.
Time to buy for value investors?
AMP is an interesting one. The AMP share price is almost the lowest it has been since listing (around 20 years ago).
But if AMP is broken up and sold then investors may be able to get more money back than the current AMP market cap, even after paying tax. But that would be a lengthy process.
It’s not the type of investment I like to make. AMP may be worth more than the sum of its parts, but what happens to the share price once AMP starts selling divisions?
There are other financial ASX dividend shares I’d much rather buy like Magellan Financial Group Ltd (ASX: MFG) which I covered here.
