MFG has endured, as the queen so eloquently put it, an “annus horribilis” with the founder Hamish Douglass taking a leave of absence and the share price plunging to levels not seen since 2014 – many investors have been burnt catching this falling knife. We hold a small position in our Income Portfolio but we’ve never really been close to fighting the downside momentum with this one but the risk / reward is now looking tempting for aggressive players:
- Buy MFG around $15 targeting $22 while stops must be under $13.75, very exciting risk reward BUT not for the faint hearted.
Hence if we considered such a play it would only be with a 3% weighting hence if it were to go wrong the damage to a portfolio should be capped around 0.2~% – statistically most trades that involve ”picking bottoms” do fail hence the risk / reward must be compelling.
MM likes MFG under $15 as an aggressive play
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