I suspect trading tomorrow will probably answer this conundrum, but I know there are some far wiser owls than me that contribute to this bb & I would be interested in their opinions.

My question is this: the chart below looks to me like a pullback of the uptrend (ie when it went north through 14.00) however I am unsure as it has now broken down through 14.00 whether this is trending up or down :-(

So what do you think - up or down, or should I just flip a coin :-)) ?

Just out of auction.

Credit Suisse Neutral 112.05 106.30 115.00 125.00 Retains

Numis Sell 115.35 106.30 - 75.00 Reiterates

Just sold all mine for about 20% gain (including divi) in two months. Not my type of stock but will probably go on a massive bull run now that I'm ouy.

Ditto Dil, limited out at target 115. Plenty of scope to get back in if does go back on a bull run.

Time to short :-))

Note from Aviate Global today:
"We knew AHL performance (key driver) was good in Q1 (and even better since), the investment gains were $2.8bn in Q1. Outflows are still happening, there is a 6 month lag between inflows and good performance. Net outflows were big -$3.7bn (street going for something like $3bn), although only $600mn came from AHL open-ended (rest from guaranteed product and lower margin AUM). This is still a problem but given the leading indicators are good (performance) and the effects of the past lagging (outflows), performance matters more for the story. The positive surprise is as of 29th April, 70% of AHL’s open-ended funds are now at or within 5% of high water marks (was 18% on 25 Feb), AHL is +8% since end of Q1 (worth $800mn on assets). With the excess capital, they are buying back expensive debt (instead of a special dividend), calling all tier 1, tier 2, hybrid and senior debt. Management is guiding that interest expense will be cut by $78mn (pre-tax) in 2014 (cons net income in 2014 is $208mn although not all this interest cost goes through P&L, but all effects EPS). Excess capital expected to be $450mn post this at year end, which may be used for buyback/dividend or M&A. We actually prefer this route, special dividend are one-offs while improving profitability lays the ground for a higher sustainable dividend, although a special dividend may still happen. All cost saving programmes on are track (expected).
The message from management is consistent, it is performance that counts, get that right and all else will flow. On that basis, Man Group is turning around and the street still has a bearish and backward looking view. We knew AHL was strong coming into results, so Q1 was really an update on AUM outflows (still high) and what management is doing with the excess capital. On outflows, they are still high, but performance is the leading indicator and this is good. There is scope for flows to come from Japan (15% current AUM) given the change that’s happened there, they have good distribution. Time will tell. LO will gain first, followed by alt assets. On excess capital, thought long and hard about it, decided to buy back all the debt, $75mn saving ($50mn interest cost since not all goes through P&L – we can explain this if you want to know why). The repurchase of debt cleans up an already robust balance sheet and will have a significant effect on 2014 net income and EPS, but more muted in 2013 due to redemption fees due and interest payable up to the redemption dates (between May and August this year). There is still excess capital, yet to decide what to do with it.
Conclusion: AHL the major driver, performing well. Flows will follow with a lag. The 2013 EPS numbers might be messy, but there’s a big saving for 2014 (upgrades), so this is a cleaner story now on dividend flow we think. The street is slow to react and AHL performance and still potential for higher inflows means the leverage to the upside is still massive."

sp slipping towards 100p?

Apparently a bit of an uncomplimentary broker note came out yesterday (?). Will post when I find it.

Eventually found the HSBC note:
"Balance sheet restructuring is welcome… On 3 May 2013, Man Group announced that it will use surplus capital on its balance sheet to repay all its outstanding debt and preferred shares. This should save almost USD50m in finance costs from FY14. However, this repayment would also lead to a reduction in surplus capital by 17p per share.
AHL has been doing fine. AHL has been picking up trends and is up 5.86% YTD. As on 27 May, we estimate that open-ended AHL was 8.2% below the high watermark. With AHL performing again, the likelihood of performance fees has increased. We raise our performance fee PBT estimate by 51%.
However, flows are likely to remain poor: Man Group has been reporting net outflows for the past seven quarters. As shown in the table on page 3, most GLG alternative funds – excluding Market Neutral, European long short and European distressed debt funds – are underperforming the benchmarks over one and three years. We believe this underperformance is likely to result in a continuation of outflows from GLG funds. Despite the recent improvement in investment performance, we expect open-ended AHL funds to see net outflows because we believe that AHL been removed from certain private banking networks in Europe. Also, the turn in the performance of AHL should not be taken as guaranteed because policy makers are still interfering in financial markets – the liquidity injected so far by policymakers will be withdrawn over the next few years. Given that market reactions to policy makers’ announcements are hard to model, this might leave trend-following strategies like AHL struggling again. As highlighted by management, there is no demand for guaranteed product and hence the outflows will continue from that. With cUSD1.7bn of maturities due in FY15 and FY16, headwinds from this business will increase significantly over the next 18 months."

UBS note today:
"At the risk of being seen as being too short term and having a volatile rating on Man Group; we believe that the very volatile nature of the stock calls for either a short term view on the stock or for a very long term one. With AHL still representing the majority of Man Group’s earnings; and with the high operating leverage in the company (1% AHL impacts earnings by 6%), we believe that Man Group will remain a volatile stock, and think that this should be reflected in our rating.

A month ago, we were positive on Man Group for the following reasons:
(1) we were expecting flows to turn as risk appetite is rising across the globe and notably in Japan, where Man Group has strong distribution,
(2) asset correlation stood at 5-year lows which is conducive for Hedge fund performance and for flows,
(3) we expect further consolidation deals that could be materially accretive.
(4) We also saw a “call option” on performance fees as AHL was 4.5% away from HWM. GLG has 71% of its AUM at HWM.
(5) Valuation was compelling at 6.7x EV/NOPAT CY15E.

Flows into AHL have typically lagged performance by a few quarters. CTAs and AHL had done well YTD. With a significant and sudden deterioration in performance, we believe that it is now unlikely that we will see inflows into AHL in the near term

Man Group shares remain highly correlated to AHL, with AHL down 12% from its recent peak; we believe that -12% on Man Group shares (broadly in line with other asset managers), Man Group now trades at 8.7xEV/NOPAT CY15E, 30% higher than a month ago.

We continue to assume 0% return from AHL, clearly should AHL recover, there is considerable upside (outlined in our upside scenario). However we see a risk investor appetite returning to AHL as delayed in the event of strong performance, given recent volatility in the fund.

We are downgrading Man Group to Neutral following what in our view is a degradation in the investment case: (i) Man Group remains highly dependent on AHL, which has had an 12% pull back from its recent peak, leading to a significant cut to earnings, but also reducing the probability of flows turning (ii) Japanese retail’s risk appetite may have been negatively impacted by the recent bout of volatility (iii) valuation on our mark to market estimates is less compelling, with shares trading in line with peer asset managers despite AHL underperforming.

We believe that Man Group’s new management team has scope to further add new products and/or right-size the distribution platform to the company’s lower level of AUM. We have no strong view on how well AHL will perform, but we see strategic options available and scope to further adjust the cost base. However, Man Group is likely to remain a very volatile stock in the near term.

AHL fund continues its decent: AHL declined -6% over the past week and the fund is down 12% since its recent peak in May. Man Group shares are 12% off their recent peak. 1% decline in AHL results in c.6% decline in EPS."

In auction -14.9%

A couple of broker comments this morning:
Aviate Brokers: "A car crash no less in Man Group yesterday with lots of people jumping up and down about the weak AHL figure. First things first, yes it was WEAK. Dire in fact. -6.8% would be a bad YEAR for some funds let alone in a week.

BUT…note that all the things that have been trending (Yen, Nikkei, Bonds, Dollar, Equities etc) all basically stopped trending simultaneously and went into sharp reverse. This has clearly caused problems across the whole CTA space and in retrospect if we have known that AHL would fall 12% in 3 weeks then we would probably have suggested lightening up. Ironically, after the first 2 weeks of poor performance investors seemed quite sanguine. It may just be that the 3rd week in a row was the Tipping Point that sent people scurrying for the exit, including UBS who have been one of the few who have been quite sensible on the stock so far. Anyhow, we are where we are and the million dollar question is: “Where next?”

The first thing that I think is worth noting that whilst AHL is 12% off the top, the stock is actually down 25% already since May 21st, just 2 weeks ago.

Secondly, my personal view and of course I may be mad/wrong/stupid is that SOME of the abrupt reversals we have seen are likely over-reactions (tapering obsession probably getting a little OTT, value surfacing in the Nikkei?) and that various things will start trending again shortly. Also as an aside I think that there are actually the building blocks being laid of some NEW trends (think Bonds, Cyclicals etc) which will be fertile ground for AHL and others going forward.
Thirdly, although the market does not like to acknowledge it, there is a lot more to the MAN Group story than weekly AHL numbers alone. We have ongoing cost-cutting, capital returns (remember the $500m they found under the sofa), debt reduction, GLG recovery, long-only expansion, M+A opportunities and massive distribution capabilities in Japan which are still relevant given all that is going on over there.
Fourthly, remember that the share price went up so far, so fast that many people felt they missed it. It turns out that many large institutions were acquiring stakes. There are still plenty of people who have not and some people who are still short. If I were them I would be breathing a MASSIVE sigh of relief and getting out of my short whilst the going is good. We have re-traced roughly half of the move since Nov-Dec in just 2 weeks and the building blocks are there for one of the best corporate turnaround stories in Europe."

Merrill Lynch:
"AHL, Man’s managed futures manager, has given back in essence all of its 2013 performance since the middle of May, as rising bond yields have taken their toll. We think this has been an issue for trend followers as a style. There is no mystery to this – AHL performance is available daily. However, in spite of the low information content of this, the impact has become so severe that we have reflected the recent falls in our estimates. These have caused management fee eps to fall by 30-37%, with performance fee estimates falling 13% this year and 27% next.
Our 12 month price objective has fallen to 130p. In essence, this reflects the impact of lower AHL AUM. We find this frustrating, as no doubt does the company and its investors. We think at current levels here is still good value in the company. GLG is performing decently and trend following remains a viable style, we think. In passing, we would note that the company has fallen 30% from its near term peak, about in line with the impact which falling AHL has on earnings. Trend following remains a viable style, we think."

what is looking a good entry price for these. out at 114p and looking attractive again but not sure where the bottom is. anyone care to guess?

Yes is looking like soon will be time to get in, mind you AHL results were a bit off, so no wonder they have fallen this far

7 month+ lows today @77.75p

doh. i only bought back in y'day at 86.4p [i have no control on SP as part of a regular saver ISA and buy [or not on a set date]]
did alright out of the last rise so hopefully will do do again, may take a little longer this time

Alex

Merrill Lynch note today:
"AHL stabilised after the sharp falls caused by bond yields backing up in May. However, like other CTAs it has recently taken another leg down, albeit a modest one. Given our last set of numbers were struck before AHL reached the bottom of its post taper talk decline, this has led to material estimate cuts (as did the first AHL fall).
Partly, this is due to negative performance eroding AUM, but also we have assumed somewhat higher net redemptions from AHL. We don’t think that money will flood out of the fund; AHL’s performance directionally mirrors the CTA style, it has a diversified investor base and the strategy itself is not monolithic. AHL Evolution, for example, strikes us as marketable now. However, we think our previous flow estimates are likely to be too optimistic. As a result, we have cut numbers for FY 13-15, by 33-36% for management fees.
Our price objective has fallen in lockstep, and is now 96p, from 130p. This still provides some upside for Man, but not enough to recommend the shares, we think. We think the stock could fly given a fair wind from AHL. Equally, if AHL takes another leg down, once again we would be looking at increased outflows and more estimate cuts."

Results today

....
The former FTSE 100 (FTSE: ^FTSE - news) firm said client outflows were $1.3 billion during the second quarter, although this was down from the $3.7 billion seen in the first quarter and better than RBC Capital Markets' forecast of $2.1 billion.

...

StockMarketWire.com
Man Group posts adjusted pre-tax profits of $134m for the six months to the end of June - up from $122m last time.

Funds under management stood at $52.0bn at the end of June (31 December 2012: $57.0bn), reflecting sales of $6.5bn, redemptions of -$11.5bn, investment movement of $2.5bn, FX translation effects of -$2.4bn and other movements of -$0.1bn.

And the group reports a mixed performance in the period: AHL Diversified Programme -3.2%; GLG Multi-Strategy +5.1%; FRM Diversified II strategy +3.1%; Japan CoreAlpha strategy +41.4%.

Chief executive Manny Roman said: "While the first quarter of the year benefited from a more stable environment in financial markets, the second quarter was characterised by renewed volatility.

"Against this background, Man's investment performance was varied: good in discretionary and challenging in trend following. In terms of flows, investor appetite remained muted as renewed market volatility tempered investors' willingness to put their money to work. A sustained improvement in investment performance, particularly from AHL, remains the key prerequisite for an improvement in net flows.

"Management remains focused on running the business efficiently. The operating cost savings announced in 2012 have now been executed and during the process further savings have been identified, including some relating to the lower level of the guaranteed book. At the same time, we have continued to invest in people and products, for example building the fixed income and macro platform at GLG and developing successful, high-performing quantitative products, such as Evolution."