Down 5% in a month, is the AMP share price a buying opportunity?

We check whether to buy or sell AMP shares today.

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Key points

  • AMP shares have been infamous underperformers in recent years
  • The financial services company has struggled ever since the 2018 banking royal commission
  • But one funds management expert says AMP could finally be in the buy zone

No doubt investors would be painfully used to the AMP Ltd (ASX: AMP) share price falling. Over the last decade or two, AMP has seen one of the most dramatic falls from grace in the history of the ASX. The once-venerated institution has gone from a respected ASX 200 blue chip share worth over $13 in 2001 to today’s price of around $1 a share.

Yes, today AMP shares are being priced at $1.14 each. That’s up a healthy 1.79% for the day today. But even so, it still leaves AMP with a one-month loss of more than 5%.

AMP’s woes have stemmed from many years of struggles following the reputation-shattering 2018 banking royal commission. It has already sold its flagship life insurance arm, and more recently offloaded parts of its Collimate Capital division (formerly known as AMP Capital).

But could these share price levels finally represent a buying opportunity for the AMP share price? After all, surely there has to be a pricing point for the company… One that perhaps represents good value after the five-year fall of 77% that is now behind us?

Is the AMP share price in the buy zone today?

Well, one expert investor who thinks AMP is a bargain right now is Geoff Wilson, the founder and chairman of Wilson Asset Management (WAM). He is the fund manager of popular ASX listed investment companies (LICs) like WAM Captial Ltd (ASX: WAM).

According to a recent report in the Australian Financial Review (AFR), Wilson reportedly picked AMP as a buy during a recent investment roadshow. He pointed out that AMP has net tangible assets worth $1.35 per share. In addition, he noted that AMP is “tipped to return somewhere between 50¢ and 60¢ when it completes the sale of its funds management business”.

“So you’re buying at a 20 per cent discount now, and when they pay back half the money it’s what, a 30-plus per cent discount,” Wilson stated.

So that’s a pretty emphatic endorsement. But only time will tell if his bullish projections turn out to be accurate. No doubt AMP investors will have their fingers crossed that they are.

At the current AMP share price, this ASX 200 share has a market capitalisation of $3.75 billion.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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