Latest intelligence in this week from AI specialists Irithmics have shed some interesting light on the attitude of long term, strategic investors towards Abrdn (LSE:ABDN).
The report, generated by specialist machine learning software that tracks the behaviour or larger investors in the market, shows investor appetite for Abrdn looks quite subdued.This is reflected in the Abrdn share price, which hit a recent peak in mid-February at 331p but has since been trending steadily downwards. Volumes in the stock are also down considerably. The company is starting to look like better value than it has for a while, but the market remains unconvinced.
Irithmics indicated that there was a strong negative bias on Abrdn shares from longer term, strategic investors in the stock market. Tactical traders who take a shorter term view, look much more positive. That said, overall appetite for the stock is well down.
The market is generally primed for positive news from the fund manager, however.
Abrdn share price not performing well
Abrdn has not been looking like a good bet for investors recently. The share price performance has not measured up well against either the FTSE 100 or indeed the stock of its competitors, the likes of Jupiter or Schroders. The rebrand from Standard Life Aberdeen does not seem to have gone down well with the press or indeed industry insiders The Armchair Trader has spoken to.
The Irithmics data is important as it provides a snapshot of where larger investors currently stand, or indeed are likely to stand, on the stock.
The share price performance will have left existing investors wondering when this ship is going to turn itself around. While the latest Abrdn interim dividend has not fallen, the total dividend has been rebased meaning that the total annual dividend will be 14.6p or at last year’s reduced level. This has not gone down well with a market that is becoming more focused on yield.
Investor focus could be on dividends situation
Abrdn has said that it plans to start lifting dividends again when coverage reaches 1.5 times adjusted capital generation. In the last half year period that was 1.14. While the dividend is therefore covered, it seems like investors will be some time waiting for an increase. This goes a long way to explain the reduced appetite from the strategic investment community we feel.
The other big issue is the decline in assets under management. There does seem to be a problem around keeping investors on board with the company’s funds. AuM was reported down another 1% for 1H 2021. The rate of capital outflow from Abrdn funds is slowing, however, and some investors will be hoping for a turnaround.
Management is still focusing on cost savings, so there are hopes that profitability at Abrdn will increase soon. But we suspect that many investors of scale will still be sitting on the sidelines for some time to come.
AI data remains a good way to analyse how the larger investors who can drive share prices of bigger companies are currently reacting or might be inclined to react in the future.
