Hub24 Ltd share price up 2700% in 5 years

The Hub24 Ltd (ASX: HUB) share price has risen 3% so far today on news of a positive funds under management (FUA) update. The Hub24 share price has increased by 135% over the past year and over 2,700% in five years.

The company experienced strong quarterly inflows for the quarter to 31 December 2017, net inflows were $554 million and gross inflows were $771 million. Gross inflows were 62% higher than the prior corresponding period.

FUA ended the quarter at $6.9 billion and has now reached $7 billion. This means it has grown from $5.5 billion at 30 June 2017.

The company had 14 new licensees sign distribution agreements during the quarter representing significant growth opportunities.

Hub24 and Agility have released a joint development initiative to a few pilot clients, which could be a positive step.

The company released platform enhancements in this quarter that create adviser efficiency and support their compliance obligations. Hub24 has moved into new premises to support productivity and future growth.

Paragem has licensed an additional advice practice and now comprises 32 advice practices and 76 authorised representatives.

Hub24 achieved 5th place across the industry in regards to its market share of annual net inflows. The average FUA per adviser increased to $6.6 million.

It probably won’t grow anywhere near as much over the next year due to its high valuation. It’s currently trading at 34x FY17’s earnings.

Foolish takeaway

This update is very positive and a clear sign that Hub24’s business plans are working. It’s not the type of business I’d normally invest in, but I can see why some investors are getting very excited about it.

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