Pepper Money Limited

Section 1: Company Overview and Fundamental Insights

1.1 Company Overview:

Pepper Money Limited (ASX: PPM) is one of the largest non-bank lenders, which focuses on underserved customer segments in the residential, commercial real estate and consumer finance sectors. 

1.2 The Key Positives, Negatives, Investment Highlights and Risks

1.3 Top 10 Shareholders:

The top 10 shareholders collectively form ~17.42% of the total shareholdings. AustralianSuper holds the maximum number of shares with ~9.24% shareholding, followed by Netwealth Investments Ltd. with ~2.58%, as depicted in the chart below: 

1.4 Key Metrics:

PPM’s asset/equity ratio declined from 27.13x in FY21 to 24.84x in FY22.

Section 2:  Business Updates and Financial Highlights

2.1 Recent Developments: The below picture shows the recent updates:

2.2 Key Takeaways from Recent Results:

Section 3:  Key Risks and Outlook

Section 4: Stock Recommendation Summary

4.1 Price Performance and Technical Summary:

The stock has witnessed a fall of ~13.33% in 3 months and over the last 6 months, it has decreased by ~17.46%. The stock has a 52-week low and 52-week high of AUD 1.105 and AUD 2.330, respectively and is currently trading below the average of 52-week high-low average.

4.2 Fundamental Valuation

Valuation Methodology: Price/Book Multiple Based Relative Valuation (Illustrative)

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is March 21, 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Dividend Yield may vary as per the stock price movement.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

Disclaimer

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