Investment Management Publications
March 9th, 2012
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Private investors are likely to snap up shares in Facebook
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Investors line up for a stake in Facebook
Alexandra Goss Published: 5 February 2012
Private investors are likely to snap up shares in Facebook, brokers predicted, after the social networking site announced plans for a $5 billion (£3.2 billion) float later this year.
It would be the biggest sale of shares by a technology firm and could value the company at up to $100 billion. It reported profits of $1 billion for 2011.
Interest in internet shares is already high among private investors. Apple was the most bought global stock by clients of Barclays Stockbrokers last year.
However, there were mixed results for floats in 2011. Linkedin, the business networking site, has fared best, with the share price rising 71% since its listing in May, according to AWD Chase de Vere, the adviser.
Jive Software, which supplies social networking sites, is up 24% since listing in December, while Groupon, the daily deals site that floated with much hype in November, is up 15%.
Others have bombed. Renren, China’s answer to Facebook, has fallen 61% since going public in May and Friendfinder, a US group that also floated in May, is down 87%.
Philip Pearson, co-manager of the GLG Technology Equity fund, said: “We will be looking to participate in the Facebook float and already effectively have a stake through our holding in mail.ru, a listed Russian social network whose stake in Facebook is worth about a third of the firm’s value.”
Patrick Connolly at AWD Chase de Vere is more cautious. He said: “A real danger is that these shares are over hyped and investors end up paying a price that cannot be justified by the fundamental business performance.”
Ian Warmerdam, co-manager of the Henderson Global Technology fund, does not rule out investing in Facebook, but prefers Apple which recently reported record quarterly profits. “More strong growth and earnings are likely for Apple,” he said.
“The stock appears very attractively valued. It trades on a price/earnings ratio of nine times 2013 earnings, a discount to the S&P 500 (on a figure of 12.7 times) and the technology sector (12.5 times). Linkedin is trading on a figure of 27.”
Simon James at Gore Browne Investment Management recommends tapping into technology through a fund, such as the Herald Investment Trust or Polar Capital Technology Trust. Connolly would prefer to get exposure through US or global funds, such as Threadneedle American (22% in technology) or Neptune Global Equity (17%).
February 14th, 2012
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Simon James, founding partner of GBIM, said: "We are excited to welcome both Simon and Chris to our growing team; their appointment is part of our ongoing commitment to ensuring that we provide an exemplary and tailored service to all our clients.
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http://www.thesundaytimes.co.uk/sto/business/money/investments/article867181.ece
February 14th, 2012
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