Stock of the day 28/11/2014 - Aberdeen Asset Management PLC

International investment manager Aberdeen Asset Management is set to announce its full year earnings for 2014 next Monday, after recently making a landmark acquisition deal.

Aberdeen Asset Management, which is Standard Chartered PLC’s second biggest shareholder, has had a choppy year, with the Scottish referendum and a bearish reaction to a Q3 interim report causing some dramatic peaks and troughs for the company. Disappointingly for the asset management group, its peak price for 2014 occurred in the first week of the year, at 498.05. Since then the share prices have not been able to fully recover to that level. Following this peak the company saw an immediate decline in share prices, culminating in its 2014 low in March at 360.8. However, prices saw a slight recovery in April as Fitch Ratings upgraded the company’s credit rating due to its diversification of revenue, causing 6% growth and a climb to 449.3.

This set the level for the end of spring and the start of summer. However, an interim report in July led to another major drop for the company, from 465.65 on July 25th to 402.15 on August 8th. Assets under management were £2 billion under target at £323 billion, and the total net outflow doubled to £8.8 billion after a significant Asian client withdrew. Aberdeen Asset Management had begun to recover from this blow as the UK geared up for the Scottish referendum in September. However following the victory of the ‘no’ vote the company saw a drop of 60 points, from 445.25 on September 19th to 384.7 on October 2nd.

Since this dual blow, the company has managed a steady rise to reach 454.75 at the start of this week. This rally was aided by the news on November 21st that Aberdeen Asset Management and Dutch financial services provider APG had acquired a major portfolio of new public private partnership assets. On the day of the announcement the Scottish company grew 2.13% to close at 455.5. This acquisition follows the completion of Aberdeen Asset Management’s purchase of Scottish Widow Investment Group in May.

Friday saw the company open at 455.15; the number it has stabilised around all week. Despite the recent good news, analysts at Barclays, among others, have given the company a rating of ‘hold’ and an average 12 month target price of 477.69. This isn’t a great indicator of confidence; the asset management company will be hoping to at the very least avoid the precipitous drop occurred after its last earnings release.