Daily Briefs

• The Feb 26th announcement introduces the Corporate Value Up Program and unveils the Korea Premium Index direction. Methodology finalization expected by mid-March; ETFs launch by mid-May.
• Similar to JPX Prime 150, KRX aims to target enhancing equity spread and PBR trends (+1.0x) while also integrating dividend growth rate. KOSDAQ stocks may be omitted.
• NPS’s role is vital for the Korea Premium Index, yet aligning its passive strategy with this index faces challenges. Ongoing discussions aim to adjust regulations for this index investment.

Key points

• Arthur J Gallagher is a strong player in the U.S. SME broking market trading at fair value with potential upside
• Estimated 5-year returns are 10% IRR / 1.5x MOIC, with possibility of higher returns with EBITDA growth and multiple expansion
• Insurance brokers benefiting from firm P&C pricing cycle and market conditions, providing downside protection and potential for sustained organic growth, investor focus on growth trend maintenance

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Bell Financial Group Ltd (ASX:BFG) is a diversified provider of financial products and software solutions within, and increasingly outside, its traditional full-service stockbroking business.
• BFG reported FY23 NPAT of $24.3m, 5% below FY22 and 10% below RaaS estimates.
• A H2 FY23 miss in Technology & Platforms (down 8% against a H1 result +100%) was the major difference to RaaS estimates, with all other divisions trading in-line with generally challenging but improving trading conditions. 

• Bell Financial Group Ltd (ASX:BFG) is a diversified provider of financial products and software solutions within, and increasingly outside, its traditional full-service stockbroking business.
• BFG reported FY23 NPAT of $24.3m, 5% below FY22 and 10% below RaaS estimates.
• A H2 FY23 miss in Technology & Platforms (down 8% against a H1 result +100%) was the major difference to RaaS estimates, with all other divisions trading in-line with generally challenging but improving trading conditions.

Key points

• Marsh McLennan is the largest insurance broker globally, with strong organic growth driven by its consulting business
• Current valuation at $198 with an EV/2024E EBITDA of 16.0x is considered fair, offering potential 5-year returns of 12% IRR / 1.7x MOIC
• Predicted returns could increase to 16% IRR / 2.1x MOIC with a 13% EBITDA growth rate and a multiple expansion to 17.0x, with a favorable market backdrop for insurance brokers helping to drive growth trends

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Key points

• MFA Financial’s Series C preferred stock offers a 25% IRR and 40% total return over 18 months
• Favorable entry point for investors due to current interest rate environment and preferred instruments being out of favor
• MFA’s position in the face of LIBOR transition challenges sets it apart, making it a strong choice for short-duration fixed income investing

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.