TFSA Investors: How to Become a Billionaire

AGF Management Ltd (TSX:AGF.B) is an attractively priced, fast-growing asset management company. The recent dip in the stock price could be a wonderful entry point for long-term value investors.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

AGF Management (TSX:AGF.B) is a publicly traded asset management and investment holding company. The company provides investment services to public and corporate defined benefit pension plans, endowments, and foundations, sovereign wealth funds, corporate plans, insurance companies, and sub-advised mandates.

The company is ridiculously cheap with a price-to-earnings ratio of 11.11, a price-to-book ratio of 0.49, and market capitalization of 447 million. Debt is very sparingly used at AGF Management, as evidenced by a debt-to-equity ratio of just 0.17. The company has average performance metrics with an operating margin of 17.96% and a return on equity of 4.33%.

The company invests in capital markets, particularly in public equity and fixed-income markets across the world. While investing in equity markets, the company adopts a “growth at a reasonable price” strategy and invests in growth stocks after employing fundamental analysis to identify investments. AGF Management has been operating for over 60 years and is based in Toronto, Ontario.

In the most recent quarter, AGF Management reported total assets under management (AUM) of $37.4 billion compared to $38.8 billion in the same period in 2018. The company’s private alternative assets under management increased 11% in the quarter to $2.4 billion, resulting in earnings per share of $0.18, increasing $0.04 on a year-to-year basis.

The company is looking to grow by prudently allocating capital and mergers and acquisitions. Recently, AGF Management announced a merger involving a company subsidiary, between Smith & Williamson and Tilney, to create a leading integrated asset management and professional services group in the United Kingdom with over £46 billion in assets under management. The company estimates that the transaction, which is still subject to subject to regulatory approvals and anticipated to close early 2020, will result in total cash and equity proceeds of $320 million compared to an estimated carrying value at closing of $137.5 million.

The company is also expanding product offerings to meet client needs. AGF Management recently launched three liquid alternative funds in Canada: AGFiQ US Market Neutral Anti-Beta CAD-Hedged ETF, AGFiQ US Long/Short Dividend Income CAD-Hedged ETF, and AGFiQ US Long/Short Dividend Income CAD-Hedged Fund. The company also continued to experience growth across proprietary U.S. liquid alternative exchange-traded funds. This growth is a reflection of AGF Management’s uniquely positioned suite of funds, including an anti-beta market neutral U.S. equity strategy to meet investor demand for diversification and uncorrelated returns to cushion against anticipated market volatility.

The company is also expanding digital growth strategy and recently developed an interactive tool to equip the company’s business development teams with portfolio stress testing, risk analytics, and comprehensive investment proposals for use across a range of clients and regions, including financial advisors and institutional investors. The company is seeing fast growth — AGF Management’s private alternative and quantitative investment management businesses have grown 140% and 16%, year over year, representing $10.2 billion, or 27% of total assets under management. These businesses fit well with AGF’s other business lines and continue to diversify the revenue sources of the company.

AGF Management is an attractively priced, fast-growing asset management company. The recent dip in the stock price could be a wonderful entry point for long-term value investors.

Should you invest $1,000 in Agf Management Limited right now?

Before you buy stock in Agf Management Limited, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Agf Management Limited wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $18,391.46!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 35 percentage points since 2013*.

See the Top Stocks * Returns as of 1/7/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Nikhil Kumar has no position in any of the stocks mentioned.

If You Thought Apple and Microsoft Were Big, You Need to Read This.

The steel industry produced the world's first $1 billion company in 1901, and it wasn't until 117 years later that technology giant Apple became the first-ever company to reach a $1 trillion valuation.

But what if I told you artificial intelligence (AI) is about to accelerate the pace of value creation? AI has the potential to produce several trillion-dollar companies in the future, and The Motley Fool is watching one very closely right now.

Don't fumble this potential wealth-building opportunity by navigating it alone. The Motley Fool has a proven track record of picking revolutionary growth stocks early, from Netflix to Amazon, so become a premium member today.

See the 'AI Supercycle' Stock

More on Investing

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

How to Use Your TFSA to Average $382.50 Per Month in Tax-Free Passive Income

This TFSA strategy can reduce risk while raising the average yield.

Read more »

Trans Alaska Pipeline with Autumn Colors
Energy Stocks

Better Pipeline Stock: Enbridge vs. TC Energy?

Enbridge and TC Energy are two pipeline stocks that offer shareholders tasty dividend yields in January 2025.

Read more »

Man holds Canadian dollars in differing amounts
Dividend Stocks

Invest $22,000 in This Dividend Stock for $108.50 in Monthly Passive Income

This dividend stock is a top option for investors looking for not just long-term passive income but regular income every…

Read more »

stock research, analyze data
Dividend Stocks

Generate $500 in Tax-Free Monthly Income With This Easy Strategy

Passive-income investing is easy thanks to this fund's steady $0.10-per-share monthly payout.

Read more »

Start line on the highway
Stocks for Beginners

3 Beginner-Friendly Stocks Perfect for Canadians Starting Out Now

New investors seeking beginner-friendly stocks should consider this trio of options that can provide decades of growth and income.

Read more »

how to save money
Dividend Stocks

Got $2,000? 5 Telecom Stocks to Buy and Hold Forever

The discount and recovery potential are reasons enough to consider telecom stocks in Canada right now. The fact you can…

Read more »

cryptocurrency, crypto, blockcahin
Tech Stocks

Earn an 11% Yield With This Bitcoin-Focused ETF

This ETF converts the high volatility of Bitcoin into above-average monthly income.

Read more »

The TFSA is a powerful savings vehicle for Canadians who are saving for retirement.
Investing

3 Canadian Stocks to Consider Adding to Your TFSA in 2025

These three Canadian stocks are excellent additions to your TFSA in this uncertain outlook.

Read more »