The Pinnacle Investment Management Group Ltd (ASX: PNI) share price surged more than 10% higher yesterday despite the ASX enduring its worst trading day in more than 12 months.
Why did the Pinnacle Investment share price surge?
The Pinnacle share price reported its full-year earnings for the financial year ended 30 June 2019 (FY19), which was headlined by a 32% increase in underlying net profit after tax (NPAT).
Pinnacle's funds under management (FUM) climbed 43% year-on-year (YoY) to $54.3 billion, despite a difficult year for the wealth management sector; however, this did include $6.8 billion of FUM acquired in July 2018.
Another positive for investors was Pinnacle's net inflows of $1.5 billion throughout FY19 as it emerged unscathed from the 2018 Royal Commission, while $2.9 billion of fund inflows came from retail rather than institutional investors.
Pinnacle's underlying earnings per share (EPS) rocketed 28% higher compared to the prior corresponding period (pcp), climbing to 18.3 cents per share (cps) as the company increased its dividend per share (DPS) by 33% to 9.3 cps.
Another factor in the share price increase was the company's strong balance sheet situation, with cash on hand of $51 million as at the end of financial year.
Foolish takeaway
While the Pinnacle share price rocketed 10.34% higher to $4.27 per share at market close yesterday, the S&P/ASX 200 (INDEXASX: XJO) index closed down 2.44% at 6,478.1 points in its worst trading day in more than 12 months.
The Pinnacle share price proved a major outperformer in yesterday's trade, but the real question is whether or not the share price can continuing climbing throughout August – particularly if we see further escalation in the US–China trade war.
While I'm not personally looking to invest in Pinnacle, this latest outperformance would suggest that it's a better option in the wealth management space than AMP Ltd (ASX: AMP) or IOOF Holdings Limited (ASX: IFL) in the near-term.
