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Magellan Financial Group (MFG)
BUYActive Investor’s Recommendation
Overview: Magellan Financial Group Ltd (MFG) is an Australian
specialist fund manager providing international investment funds to high
net worth and retail investors. MFG’s fund management is undertaken by
Magellan Asset Management and its four global investment funds are
the Magellan Infrastructure Fund, the Magellan Global Fund, the
Magellan Flagship Fund and the Magellan High Conviction Fund.
LONG SHORT DIVIDEND PLAY
Catalysts: MFG is travelling in a long-term ascending channel and
boasts continuous Funds under Management (FUM) growth and profit
outperformance over the past several years. Its recent half year
performance reports net profit growth of 115% over the corresponding
period in 2013. MFG reached an all-time high of $21.68 on 27th April
2015 following a strong run off the back of this data. Following an April
FUM update that missed market expectations, MFG retreated 19% until
finding strong buyer support at $17.50.
Hurdles: MFG noted net institutional outflows of $73 million during April.
Whilst the outflow in April is most likely a one-off occurrence, there is no
guarantee that FUM will continue to increase. The performance of
MFG’s investment funds is linked to global markets and therefore
subject to price volatility.
Investment View: MFG’s recent pullback provides a buying opportunity
for investors to enter a fundamentally strong stock at a discounted price.
Therefore we enter the stock into our shorter term portfolio, as MFG
trades at the lower end of its long-term ascending channel. We initiate
coverage with a ‘buy’.SHARE PRICE
WWW.WISE-OWL.COM 1
Est. Div: 2%
Price: $18.30
Target: $21.50
TRADING CHECKLIST
LIQUIDITY Average traded 0.5m shares/day ✔
TREND Long-term ascending ✔
TRIGGER Pullback ✔
CATALYSTS Solid fundamentals, support being found ✔
STRATEGY Short-term rebound ✔
SUMMARY
TICKER ASX:MFG
NAME Magellan Financial Group
INDUSTRY Financials
LAST TRADED $18.30
FINANCIAL OVERVIEW FY14
REVENUE $148m
NET PROFIT $82.9m
EPS 53.3c
PE 34
DIVIDEND 38.3c
DIV YIELD 2.1%
TRADE OVERVIEW
DIRECTION Long
OUTLOOK 3-6m
STRATEGY Continuation
TRIGGER Pullback & Support
LAST 12 MONTHS +52%
EX-DIVIDEND DATE 17/08/2015
11 June 2015
SHORT-TERM TARGET
CAPITAL RETURN 17.48%
DIVIDEND YIELD (FINAL) est. 2%
TOTAL S’HOLDER RETURN 19.48%
0
5
10
15
20
25
2013 2014 2015
GLOSSARY
ABOUT US
Wise owl is a global supplier of intelligence, strategic solutions, and expansion
capital for emerging companies and investors. Established in 2001, wise owl
drives efficient capital allocation towards developing assets.
Media Partners:
CONTACT
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139 Macquarie Street
Sydney, NSW 2000
Phone Australia
International
Intelligence Centre
www.wise-owl.com
1300 306 308
+61 2 8031 9700
DISCLAIMER
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ARCHIVES
ANALYST
ROBERT LESTER
1300 306 308
www.wise-owl.com
wise-owl.com
2
ARCHIVES - ACTIVE INVESTOR
COMMONWEALTH BANK MAY - 15
NEWCREST MINING MAR – 15
ABACUS PROPERTY FEB - 15
CIMIC GROUP FEB - 15
HEALTHSCOPE JAN - 15
PLATINUM ASSET DEC - 15
11 June 2015
Buy Establishing a ‘long’ position in the market and expecting
appreciation of the stock.
Sell Either ‘short-selling’ the stock or alternatively closing out of an
existing position.
Stop Loss The price at which the stock is to be exited should it move in the
adverse direction.
Hold We recommend to hold this position until further notice
Target The price at which a profit target is to be executed.
Limit The limit in which we look to buy or sell the stock to.
Note: The Active Investors Portfolio is predominantly trades based on technical
analysis and short term fundamentals.
These recommendations are used for those looking to gain active exposure in
short term and volatile markets – not long term investment.