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Is the Platinum Investment share price a buy?

The Platinum Investment Management Ltd (ASX: PTM) share price is one to watch this morning after the investment group’s latest funds under management (FUM) update.

What did Platinum announce yesterday?

In its monthly update, Platinum’s FUM edged 0.87% higher to $24,612.68 million, as at the end of September.

Throughout the month, Platinum said it experienced net outflows of approximately $274 million with approximately $212 million from the Platinum Trust Funds throughout the month.

It will be interesting to see how the Platinum share price performs this morning following the minor uptick in monthly FUM.

How does this compare to Platinum’s peers?

In terms of ASX peers, Magellan Financial Group Ltd (ASX: MFG) has nearly 4 times the market capitalisation of Platinum but does operate in a similar manner.

In Magellan’s September 2019 FUM update, the Aussie investment company reported a minor decrease in FUM to $92,072 million.

However, Magellan reported net inflows of $462 million for the month with net institutional inflows of $287 million and net retail inflows of $175 million.

How has the Platinum share price performed?

There’s no doubt that 2019 has been a difficult year for Platinum Investment shareholders, with the Platinum share price falling 17.01% since the start of January.

With a valuation of $4.00 per share, the Platinum share price remains near the bottom of its 52-week trading range but could fall further as we near the end of the year.

More worryingly for investors, the Platinum share price remains in the negative on a 1-year, 5-year and 10-year timeline without accounting for dividends.

Should you buy Platinum shares?

Despite its share price woes, Platinum shares are currently yielding a tidy 6.75% per annum, which is right up there with the top ASX dividend stocks available at the moment.

With that in mind, I wouldn’t be buying Platinum for strong long-term growth prospects, given it also trades at a price-to-earnings multiple of 14.8x.

While I’m not personally game to buy into Platinum shares, and will probably steer clear of the wealth management sector until the dust has really settled on the 2018 Royal Commission, Platinum could be a good buy purely from an income perspective.

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Motley Fool contributor Kenneth Hall 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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