Broker snap: Man still a buy despite tough quarter, says Peel Hunt

18th Jan 2012 10:36

Peel Hunt has kept its buy rating on hedge fund manager Man Group, despite today's update confirming a "very difficult quarter".Assets under management fell to $58.4bn by December 31st, down 9.5% from September 30th. Though the group saw $3.1bn of new money flow into its funds in the final quarter this was comfortably outweighed by redemptions of $5.6bn, as investors fretted over the global economic situation. The net outflow of $2.5bn."Overall, the statement confirms how tough Man found conditions, with profits below estimates and fund outflows continuing," said Peel Hunt analyst Stuart Duncan.Nevertheless, Duncan says that Man is trading at 7.9 times prospective earnings (based on consensus forecasts) and is "undeniably cheap". However, he warns that the broker's 245p target price (currently under review) is likely to be moved lower.Despite the negatives, the stock was among the best performers on the FTSE 100 on Wednesday, trading 5.98% higher at 113.5p in morning trade.BC