The Sanne Group share price jumped 21% on Friday. Should I buy the stock now?

first_img I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Enter Your Email Address Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! During a week when most stocks were trending lower, the Sanne Group (LSE:SNN) share price was shooting higher. To be more exact, the FTSE 250 stock jumped 21% on Friday. Jumps like this usually catch my eye, as something significant must have happened. Given that it was a sizeable move in a positive direction, this leads me to think that it could be a worthy investment. But before I get ahead of myself, I need to investigate further.What is Sanne Group?Sanne Group is a provider of fiduciary services to financial companies. Although it falls under the category of asset management, it’s not an asset manager for retail clients like me. Rather, it provides administrative and other asset management services to alternative investors. These include private equity companies, hedge funds and private debt businesses.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…The company had over £465bn of assets under management as of the release of the 2020 annual report. Sanne can make money either from servicing current funds better (leading to higher inflows), or if a client launches a new fund. It charges fees for the services it provides on the assets, so there’s a correlation between higher revenue and higher assets.Why did the Sanne Group share price jump?There was one reason for the large jump in the Sanne Group share price on Friday. The company announced that it was rejecting an offer from Cinven to be bought out.A rejection of an offer might initially seem a negative thing. However, it shows that the management team has confidence in the current trajectory of the company. What was interesting about the offer from Cinven (a private equity firm), was the offer price of 830p. For much of the past year, the Sanne Group share price was trading around the 600p mark. It did register highs around 700p last August, but nowhere near 830p. It’s around 720p as I write, down slightly on Monday.Clearly, Cinven feels the company is worth 830p, hence the offer. So naturally the share price jumped as investors could see a clear divide between the current price and the Cinven valuation.Could the price jump further?Cinven has until June 11 to make another offer, based on the rules around these matters. I think this is another reason why the Sanne Group share price has jumped. If I believed Cinven would make another higher offer, then I could make a profit here. If the offer gets accepted and the company gets taken private, I’d receive the payment at the offer price. So there’s a possibility of making a profit from buying now and then selling if and when a deal is agreed. But I’m an investor, not a trader and believe buying for that reason alone is risky. You see, if Cinven doesn’t offer more, then Sanne Group could be back to where it was initially. So would I invest in it as a long-term play? The company is profitable (with a pre-tax profit of £20.5m last year) so I think it can survive on its own. Yet the share price may fall back to the previous range if future results don’t match the outlook potential buyers had put on it. Either way, it’s too much of a gamble for me. I won’t be buying the shares. “This Stock Could Be Like Buying Amazon in 1997” See all posts by Jonathan Smith Simply click below to discover how you can take advantage of this. Image source: Getty Images center_img Our 6 ‘Best Buys Now’ Shares I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. jonathansmith1 has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The Sanne Group share price jumped 21% on Friday. Should I buy the stock now? Jonathan Smith | Monday, 17th May, 2021 | More on: SNN Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee.last_img


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