At time of writing, AMP Ltd’s [ASX:AMP] share price has rebounded 7.4%, in another twist to the tale.
It is now trading at $2.48.
As you can see below, this is still yet to form into a consistent trend, but it may indicate that investors are starting to see the stock as undervalued:
Investors may be warming to new CEO’s plan for the company
Today the company released an updated position on capital and costs following a portfolio review.
The update contained three primary highlights, with the new CEO, Francesco De Ferrari, pursuing a new strategy.
With specific regard to the sale of its wealth protection and mature businesses, these are:
‘Returning to shareholders the majority of the net cash proceeds received on settlement of the sale, subject to unforeseen circumstances;
‘Removing approximately A$40 million (after tax) per annum of stranded costs by the end of the first full year post-separation (FY 2020); and
‘Offsetting the financial impact of unwinding distribution arrangements in the Australian wealth management business through revenue replacement and/or cost management. The distribution arrangements account for approximately A$65 million of the previously announced A$80-90 million per annum after tax.’
The release also contained a significant amount of background information on their strategic plan with a view to strengthening shareholder sentiment. In particular, it defended its decision to sell off the life insurance arm as well as its New Zealand wealth protection service.
May still be too early to tell if AMP has rebounded
As with previous assessments of this stock, there is far too much up in the air to assess in which direction its share price may be headed.
It would take a number of days of steady gains before it is possible to say a recovery is in motion.
Stay tuned to Markets & Money for further updates.
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