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HUB24 Ltd (ASX: HUB) share price jumps higher on positive update

It has been another positive day of trade for the HUB24 Ltd (ASX: HUB) share price.

At the time of writing the fintech company’s shares are up over 7.5% to $13.77. This means its shares have now put on a gain of over 110% since this time last year.

Why are HUB24’s shares surging higher today?

This morning HUB24 released an update on its inflows during the fourth-quarter of FY 2018.

According to the release, net inflows during the June quarter were $739 million, which is the second highest on record. The previous record from the fourth quarter of FY 2017 came about due to the benefits of regulatory superannuation changes.

This strong finish to the year led to record net inflows in FY 2018 of $2.4 billion, which is an increase of 24.1% on the prior corresponding period.

This means that the total amount of funds under administration (FUA) now stands at $8.3 billion, up 51.2% on June 2017.

Coincidentally, fellow fintech company Praemium Ltd (ASX: PPS) also announced FUA of $8.3 billion last week. Though that was an increase of 35% on the prior period, indicating that HUB24 is growing at a quicker rate.

Pleasingly, HUB24’s FUA look likely to get a boost in the first half of FY 2019 from the addition of Fitzpatricks MDA and a new core offering to secure clients with lower average balances seeking simpler, lower cost solutions.

In respect to the former, last month Fitzpatricks Private Wealth selected HUB24 as its platform and technology partner. The deal will see HUB24 deliver a managed portfolio solution for their current MDA and a new administration solution for the advisers across their network.

The MDA, which currently has funds under management of over $700 million, is planned to transition to HUB24 by late 2018.

Should you invest?

While I think that HUB24 and Praemium are great long-term investment options, both shares are trading at reasonably lofty levels now. This could make it worth holding out for a profit taking pullback in order to get a better entry point.

In the meantime, I think Bravura Solutions Ltd (ASX: BVS) shares are still attractively priced.

Looking for the next star stock like HUB24? My money is on these three stars of the future.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Bravura Solutions Ltd. 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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