Friday tips round-up: Man Group, Reed Elsevier

28th Feb 2014 08:22

After a poor start to the decade in terms of investment performance, fund manager Man Group was last year finally able to right the ship, at least for now. In its favour, the firm's performance fees, at 16 per cent of revenues, are above the average level in the industry of 10 per cent. Hence, it is a bit of a leveraged bet on growth of fee income. Despite that, other fund managers, such as Jupiter, with a much lower contribution from the fees, receive a higher rating. Certainly, the share buybacks and dividend increases announced on Thursday will help. However, what the firm really needs is funds that perform well. "Buying the shares remains a bet on this," says The Financial Times' Lex column.Anglo Dutch firm Reed Elsevier is continuing with its slow metamorphosis, from a smattering of print magazines and exhibitions into a mainly digital outfit. Around 81% of its activity is now digital, whereas back in 2000, when it began its shift, 64% of revenues came from print titles. Sales at this new part of the are highly predictable, coming as they do mainly from subscriptions. The company has some outperformers amongst its units, such as risk solutions, although that is more the exception. Also, while it continues to buy up little-known data assets it will soon begin to run out of suitable candidates. Nevertheless, it has the virtue of being steady and predictable. Therefore, even though the stock sells on 16 times earnings, and is not cheap, it is good for the long run, writes The Times' Tempus. Please note: Digital Look provides a round-up of news, tips and information that is impacting share prices and the market. Digital Look cannot take any responsibility for information provided by third parties. This is for your general information only as not intended to be relied upon by users in making an investment decision or any other decision. Please obtain a copy of the relevant publication and carry out your own research before considering acting on any of this information.AB