ASX code: HHL
Share price: $3.75
FY2012 Dividend: 37.4c (fully franked)
Forecast Dividend: 32c (fully franked)
Hunter Hall International Limited (ASX code: HHL) is an Australian based funds management business. Established in 1993, HHL focusses on generating long term investment performance with an ethical overlay.
HHL’s investment strategy revolves around identifying quality stocks with long term potential, and buying targeted securities at discounts to their intrinsic value.
Respected fund manager Peter Hall leads the HHL investment team and holds a majority stake in the company.
Despite tough recent times in global markets, the long term performance of HHL’s flagship Value Growth Trust has been strong. The fund has produced an annual return of 12.9% since its 1994 inception, well ahead of the benchmark world index of 3.6%.
Although recent profit results have been soft HHL is well positioned to profit from any future improvements in equity markets. In fact, many good quality fund managers like HHL, Platinum Asset Management (PTM) and Treasury Group (TRG) are highly leveraged to any future rebound in equity markets.
The fundamentals of HHL remain strong. HHL holds net cash of $15m whilst operating cash flow has been consistently sound. HHL is a highly profitable business, having averaged normalised return on equity in excess of 50% over the previous 5 years.
HHL recently declared a fully franked dividend of 16.30 cents per share.
The MyClime valuation for HHL is $4.74 and a purchase at the current market price would present an investor with an attractive yield of 8.5% fully franked.