Back in 2018 I decided to take a closer look at 3 investment brokers,namely,AGF Management,Guradian Capital and Fiera Capital.I tried to forecast which of the three would perform better over the next 3 to 5 years.So this blog constitutes a partial, not complete examination, of the 3 junior investment bankers.
AGF Management
First I will look closer at AGF which recently reported it’s annual 2022 results.AGF’s share price has traded (from 2019 to 2021) in a tight range between $7.00 and $8.50 as it has a relatively low beta.And A.U.M. (assets under menagement) have been almost stagnant during 2020 and 2021.But in 2022 A.U.M. climbed from $39 billion to $41 billion for a 5-6% increase.While in 2018 A.U.M.. were about $37 billion (a 10-11% increase).AGF is slowly and steadily climbing in A.U.M. and in market capitalization.It now has a market cap of $545 million.And most importantly net income increased from $39 million or $.55 e.p.s. in 2021 to $67 million or $.96 e.p.s. in 2022.
Guardian Capital
Guardian Capital(GCG) started off quite different than the other two financial companies.It had a portfolio of 5 million BMO shares.These shares today would be worth $665 million. And of course the shares produce steady dividend income.But GCG also made a number of small acquisitiuons of companies with largely mutual funds and ETFs.It also owned a number of fairly small insurance companies.And it sold 3 of these, this quarter to Desjardins Insurance for approximately $750 million. This blog suspects that ,although not explicitly stated, Desjardins now has a small stake in GCG. As part of the compensation may have been invested back into GCG.This will give added stability to an already stable junior financial.After the purchase the share price moved up from $25 to around $40 per share like as shown in the picture below.
for a 60% increase.
Fiera Capital
Fiera (FSZ) has been a $12 stock over the last 3 years but moved down the $10 price range and then to it’s present $8.00-$9.50 price range.It started off by making a number of small acquisitions of mutual funds which it paid for by issuing shares.And this diluted earnings.But it has made a few divestitures and now is in a position to move upwards.Recently it appointed a new CEO ,Jean-Guy Desjardins,the founder of Fiera Capital.Monsieur Desjardins has won the Order of Canada medal and has strong ties to the National Bank.This will undoubtedly strengthen ties to the National Bank which already had an equity stake in FSZ.
Fiera took the acquisition path to increse market capitalization and earnings.Consequently it now has almost 85 million shares outstanding.And it’s e.p.s. is fairly low at $.47 per share.Whereas it’s P/E ratio is about 20.The P/E ratio will only stay at 20 if FSZ shows good growth in revenues and earnings. This blog sees a more reasonable P/E at 16 or 17 unless it’s new CEO can pull off some magical transactions. For example, a substantial purchase of FSZ shares by the National Bank might keep FSZ at it’s present price range.Otherwise FSZ could move down to the $7.50 to $8.00 price area
Conclusion
The 3 financial junior companies took 3 different paths to get to their present position.But at this point it seems that Guardian Capital has made the most headway.As it started with 5 million BMO shares and made some astute acquisitions some of which they sold.Estimates are that it still owns about 4.25 million BMO shares.And it made a 60% increase in it’s share price since the start of the competition with the sale of it’s insurance companies to Desjardins.When the competition started the share price was about $25 and it has moved up to the $40 level.
AGF has seen slow and steady progress.It has moved up from the $6-$7 price range to the $8.00-$8.50 price range.In this blog’s opinion it operated too many similar funds in the past that did not catch the attention of Generation X and Generation Z customers.But first they changed some of senior management and then they added some “non-main-stream” funds to attract new customers.Furthermore at this time AGF does not have substantial investments from large investors such as National Bank nor Desjardins Insurance.So AGF is able to carve out it’s own path as picked out by it’s board.This independence may be of importance to it’s performance over the next few years.
Fiera Capital has actually gone down in price and market capitalization since the competition started.This,for example, may be one of the reason for replacing it’s CEO recently.However FSZ has a strong and clear connection to National Bank.Their new CEO will undoubtedly use this to help Fiera share price to move back up.For example, FSZ may polish up and then divest one or two of their earlier acquisitions.At this stage in it’s development Fiera has fallen behind slightly but has an attractive path going forward as does the lighthouse in the picture above.
Past Blogs to Look at 
This is rarely done in my WordPress blogs.I have 3 websites on WordPress,that is, Blogdaleup,Econothon,and Econothon II.Some of the blogs that capture the narrative above are:Blogdaleup Oct.23,2021;Econothon II Feb.5,2020,Nov.1,2018,and July16,2018.And on my other websites on Google,Blogger (Workathon and Blogdaleupsome) there are several blogs including the blog that discusses the initial competition. 
https://www.marketbeat.com/https://www.zacks.com/my_account/welcomeback.php
blogdaleup 