In the third edition of 22 ASX shares for 2022, we’ll be taking a look at a media conglomerate, two fund managers and a rising wealth platform.
If you haven’t already check out the release of Part 1 and Part 2.
1. News Corporation Class B Voting CDI (ASX: NWS)
Rupert Murdoch’s media empire and long been speculated as a potential asset break-up.
In recent times, the conglomerate model has come under scrutiny as it often trades at a discount due to the difficulty and opacity of valuing each division.
Subsequently, big names such as General Electric and Johnson & Johnson have decided to split divisions to increase focus and realise shareholder value.
Could 2022 be the year News Corp finally slices up the pie?
It owns a 61% stake in realestate.com owner REA Group Limited (ASX: REA). This is equal to $13 billion or 72% of News Corps current market cap.
Per its last full-year result, the remaining divisions – news, publishing, video and Dow Jones – produced $1.04 billion in segment EBITDA before corporate costs.
Put simply, News Corp remaining divisions are worth about 5x EBITDA (as currently valued by the market), leaving plenty of shareholder value on the table.
2. Magellan Financial Group Ltd (ASX: MFG)
It was a difficult 2021 for the once-revered fund manager as ongoing underperformance compounded into its largest client pulling its mandate just days before Christmas.
Can it stop the bleeding, and convince clients to stick by the firm?
Will the market begin to reward its external investments in Barrenjoey, Guzman y Gomez and Airlie funds management?
Arguably Magellan’s most important asset is its human capital. Do analysts, portfolio managers jump ship or ride out the storm?
Many questions, with many different answers.
3. Praemium Ltd (ASX: PPS)
Historically the wealth platform landscape has been dominated by Netwealth Group Ltd (ASX: NWL) and Hub24 Ltd (ASX: HUB) disrupting the old-world incumbents.
Praemium was making waves, but not on the same level as the former two.
But with its larger-than-life now ex-CEO leaving the company (for a second time) and subscale international operations divested, could it become the third horse in the platform race?
4. Australian Ethical Investment Limited (ASX: AEF)
The ethical fund manager saw its share price almost triple over 2021 as the ESG wave took hold.
But at 150x profit, does it still have further to run? Or will its share price retrace?
Its younger cohort of account holders and annual superannuation contributions from members underpins a long-term growth story.
But at the end of the day, it’s a fund manager, levered to market cycles.
When performance goes against them, the share price could as well (just ask Magellan).
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