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The company’s investing segment was particularly strong, with net earnings of $245 million for the third quarter and $489 million over nine months. In contrast, while the asset management segment earned $38 million in Q3, it faced a loss of $44 million for the nine-month period.
A key highlight from the announcement is the increase in investing capital per fully diluted share, which rose by 15% annually and 4% quarterly. As of September 30, 2023, this figure stood at approximately $8.1 billion or $103.19 per share. The growth was fueled by a 4% appreciation in private equity investments during Q3 and successful credit strategies that yielded a net gain of $44 million.
Strategic moves made by Onex include Onex Partners V’s agreement to acquire Accredited, a specialty insurance company in North America and Europe, finalized in October. Additionally, Onex Partners IV is set to sell its stake in ASM Global this November, with expected net proceeds of about $270 million.
The past quarter also saw Onex actively managing its share capital by repurchasing over 2.6 million Subordinate Voting Shares at a cost of $154 million. Furthermore, Onex reinforced its position in structured finance by closing its twenty-eighth U.S. Collateralized Loan Obligation (CLO) and seventh Euro CLO during this period.
Onex’s management of fee-generating assets remains robust, with $34.2 billion under management as of the end of Q3. The firm also reported an increase in unrealized carried interest to $240 million, up by $29 million from the previous quarter. With a substantial cash and near-cash balance of $1.5 billion, which represents 19% of its investing capital, Onex maintains a strong liquidity position.
The Toronto Stock Exchange-listed company (TSX:ONEX) will host a webcast later today to further discuss these Q3 results. Interested parties can access Onex’s security filings on www.sedarplus.ca for more detailed information. With total assets under management now standing at $49.7 billion, Onex continues to focus on its primary businesses of Private Equity and Credit through platforms like Onex Partners and ONCAP, navigating through challenging market conditions with strategic initiatives aimed at sustainable growth.
Drawing from InvestingPro’s real-time data and expert tips, we can further understand Onex’s financial stance. The company’s aggressive share buyback, as evidenced by the repurchase of over 2.6 million Subordinate Voting Shares, aligns with the InvestingPro Tip that management has been actively buying back shares. This strategy often indicates a belief in the company’s undervaluation and future growth potential.
Despite a declining trend in earnings per share, Onex’s net income is expected to grow this year, a positive signal for investors. Additionally, the company’s liquid assets, which include a substantial cash and near-cash balance of $1.5 billion, exceed short-term obligations, providing financial stability.
InvestingPro data further reveals Onex’s market cap stands at $4779.77M USD. With a P/E ratio of 32.61, it’s trading at a high earnings multiple, suggesting investors are willing to pay a higher price because of expected future earnings growth. Meanwhile, the company’s PEG ratio for Q2 2023 is -0.39, indicating it may be undervalued given its earnings growth rate.
Lastly, it’s worth noting that Onex has maintained dividend payments for 37 consecutive years, a testament to its commitment to returning value to shareholders. With over 100 additional tips available in InvestingPro, investors can gain deeper insights into Onex’s performance and potential.
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