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Markets: Challenge accepted

Challenger needs more of the funds management pie if it's to justify its share price, and investors hold out hope for Boart.
By · 10 Sep 2013
By ·
10 Sep 2013
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Challenger Limited

Cashing in on a buoyant share market and investor’s renewed interest in wealth management; Challenger Limited is looking to bulk up its funds management business.

The funds management arm of Challenger’s business was a highlight of their full year results, posting a 62 per cent increase in earnings and 33 per cent increase in funds under management.

Since reporting a 4 per cent increase in profit in August, Challenger has gained 17 per cent as investors vie for a slice of the fund management pie.

Of the analysts following Challenger, the consensus target price is $4.94. At $5.12 Challenger could be looking expensive in the absence of any addition to the funds management arm.

Boart Longyear

Despite a debt downgrading from Moody’s and analyst views that span from sell to underperform, investors have not stopped pushing Boart Longyear up over 16 per cent in the past five days.

Recent interest in Boart looks like investors are purely hoping the battered drilling service company can find a way out of their current problems. Debt raisings from this point are going to be expensive, further impacting the limited earnings Boart is generating.

Trading at 56 cents versus an analyst consensus target price of 47 cents have investors hopeful at best.

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Kirstie Spicer
Kirstie Spicer
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