Why the Netwealth Group Ltd (ASX:NWL) share price is climbing

Netwealth Group Ltd (ASX: NWL) is up 6% at the time of writing. The company comes under the Diversified Financial Industry classification and is trading on a very high forward price-earnings-ratio (PER) of 81x relative to the median PER of the industry. But with the company’s wealth management platform offering superannuation and non-superannuation products, it is more of a financial technology company or “Fintech”.  

The bounce in the share price may be due to the founder, Michael Heine, being named for the first time in the 2018 AFR Rich List, with wealth of $1.3 billion due to his holdings of Netwealth shares. 

Another fintech operating in the same industry is Hub24 Ltd (ASX: HUB), which has a Hub24 platform for financial advisers. The PER of 130x is exceptionally high, but is likely to be supported by strong future earnings as the company operates in a growth industry. 

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Motley Fool contributor Rosemary Steinfort has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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