St James's Place shares offer 'growth for free' says Berenberg

Wealth manager St James's Place (SJP) has delivered "yet another strong quarter", according to Berenberg which repeated its positive stance on the stock on Thursday.

The broker, which kept a 'buy' rating, said that with the shares trading at just one times 2015 estimated embedded value, "we believe that investors are receiving future growth at SJP for free".

The embedded value of a company is the present value of future profits plus the adjusted net asset value.

SJP said funds under management reached a record £49.1bn by the end of the third quarter ended 30 September, up 17% on the year before and 11% higher than the start of 2014.

Net inflows were up 23% over the quarter at £1.3bn, as total new single investments grew 19% year-on-year to £1.8bn. New business was helped the demand for ISAs, the company said.

Berenberg said that with the recent UK government changes to the at-retirement market, the value of face-to-face advice is increasing and SJP is well suited to that environment.

"While undoubtedly exposed to equity markets, these results continue to highlight our view that the stock is less geared into falling markets than the recent share price moves would suggest – continued positive net flows, coupled with the emergence of assets from the surrender period to become cash generative, provide a strong support in more challenging market conditions," Berenberg said.

The broker has a 860p target price for the stock, which was trading 2.7% higher at 706.5p by 11:30.