This fintech ASX 200 stock is ‘well positioned’ to continue growing: experts

by James · November 14, 2022

A man analyzes the stock market graph on his computer.

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The fund manager Wilson Asset Management has named a fintech The S&P/ASX 200 Index (ASX: XJO) share as one of its leading investment choices. Hub24 Ltd (ASX: HUB) shares are one of the largest 20 holdings within WAM Capital Limited (ASX: WAM) portfolio.

WAM Capital is a listed investment company (LIC) targeting “the most compelling undervalued growth opportunities in the Australian market”.

LIC has managed to deliver a gross portfolio return of 14.9% per annum since its inception in August 1999. This compares with an average return per annum of 8.1% for S&P/ASX All Ordinaries Accumulation Index (ASX: XAOA).

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What is the bull for Hub24 stock?

WAM described Hub24 as a financial services company that is “focused on investment and pension portfolio management services, also offering integrated platform, technology and data solutions”.

The fund manager noted that in the first quarter of FY23, Hub24 achieved $3 billion in net inflows from its platform, beating market expectations.

WAM explained that the result was “driven by growth in the existing client base”, as well as a 13% increase in the number of advisers using its platform, compared to the previous comparative quarter.

It was also noted that Hub24 was recently named the best SMSF investment platform in the CoreData SMSF Service Provider Awards, which rank platforms for service quality and adviser preference.

In the quarter, Hub24 also said its total funds under administration (FUA) were $68.4 billion as of September 30, 2022. This included platform FUA of $52.4 billion (up 15.4%) and portfolio, administration and reporting services (PARS) FUA of $16 billion (down 9.9% year over year due to market movements).

FY23 average monthly net inflows to date were $995 million, up 1.7% from FY22.

The company noted that in the September quarter there was an improvement in net income after a “slightly softer” FY22 fourth quarter.

Hub24 was ranked first in terms of annual FUA growth in percentage. The fintech ASX 200 stock said it still has a “solid pipeline of opportunities”.

WAM’s view

The investment team was impressed by the upbeat update given the broader market volatility. WAM concluded:

We believe the company is well positioned to continue to build on this strong performance.

Some of the other ASX stocks in WAM Capital’s top 20 holdings were: AMP Limited (ASX: AMP), Idp Education Ltd (ASX: IEL), IPH Ltd (ASX: IPH), Pro Medicus Ltd (ASX: PME), Temple & Webster Group Ltd (ASX: TPW), Webjet Limited (ASX: WEB) and Johns Lyng Group Ltd (ASX: JLG).

Since the start of the year, Hub24 shares have fallen around 9%. But in the last month it has risen by around 20%.