Magellan (MFG) has declined on the back of weaker results, plus a change in investment management personnel with the resignation of Head of Infrastructure, Gerald Stack. The stock has fallen from above $12 to around ~$8. We estimate MFG have $2.20/sh worth of cash/investments on their balance sheet, putting the funds management business on ~8x earnings. While the turnaround is taking more time, we expect a dividend of at least 6% fully franked while we wait. Further, we believe the market is underestimating their recent acquisition of Vinva and their strategic stake in Barrenjoey.
MM are buying MFG in the Active Income Portfolio, allocating 4% around $8.14
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