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Thoughts on Magellan Options (MFGO)

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Thoughts on Magellan Options (MFGO)

MM has been positive for a while on MFG and hopefully a turnaround may occur shortly based on your value assessment which I trust. My question is around the options which have been steadily decreasing in value for almost a year. Surely for the patient investor, these options will represent a low cost way to gain exposure to MFG especially considering the 2027 expiry date. Does MM ever consider options as part of your investment strategy or is that too risky?

Answer

Hi Peter,

Magellan Options have fallen from 30c to 10c over the last 12-months which illustrates their volatility. These $35 options expire on the 16th of April 2027, in other words they will be worthless on expiry below $35.10 – a big ask for an $8 stock!

  • MM has a target/valuation for MFG around $12 hence we so reason to buy MFGO, we believe they’re a “punt” at best.
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Magellan Options (MFGO)
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