In early February last year, I observed here that investment company St James’s Place (STJ) was not worth the then share price of over ten pounds a share. This was all centred on the view that ramping up the costs of its investments was, unsurprisingly, getting more criticised. Unsurprisingly, there was a sub seven quid share price a couple of months later, but today St James’s Place shares are kicking around at just shy of twelve quid. Madness again or has it finally learnt some lessons about running its business attractively?
I view St James Place (STJ) as a long term short since it has always and continues to provide a truly appalling service to its customers. You can fleece punters to reward staff and shareholders for only so long but eventually you reap what you sow and for me that makes this company uninvestable. The Dark Destroyer offers up a more detailed financial analysis of why his Shadowfall fund is short. Enjoy
The oxygen of publicity should never, ever be underestimated. As I noted here, after all the bad headlines and challenges associated with high fees and a dodgy self-serving corporate culture, 'there is only one way out of all of this for St James's Place and that is a root-and-branch business change which is driven by key managers at the top'. Well finally we might be seeing this.
I stand corrected by a reader who clearly knows more about this industry than do I. The reader agrees with my conclusion that profits at St James Place (STJ) will come under pressure which makes the shares ones to avoid but picks me up on factual errors made yesterday in bearcast HERE. The reader writes:
Did you see on Friday that St James's Place (STJ) shares re-attained the 10 quid level? Well I guess it was a good day for lots of different UK domestic shares, even for those with ongoing cultural issues such as the large UK wealth manager which I have written on negatively in the past. So is the crisis over?...
Perhaps it is a sign that i have been kicking around this investment game for a good few years now, that nothing in today's deadwood press seemed particularly new. It was last Sunday r that I felt compelled to call out those pleading for the government to block the mooted takeover of Cobham (COB) by a US defence name. I see the lobbying has now spread to the founding family...who now own 1.5% of the shares. Well if they owned 30%, 50%, 75% or - let's be radical here - 100% of the business then their view might be more influential. When you play the capital markets game of selling shares in exchange for capital to invest and grow your business, then you open yourself up to other possibilities...like a takeover. See last week's piece for a take down on why putting up capital flow barriers - especially to long-established friendly nations - is simply bonkers.
Back in January, I noted that 'fees do not matter so much to people when markets are pushing up double-digit per cent with apparent ease but when the music stops a bit, people start paying attention more and that is not good news for St James's Place (STJ)'.
Search ShareProphets |
Recent Comments |