Thoughts on Magellan (MFG)

Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.

Ask a question

The Latest Q&A

Question asked 11/06/2022

Thoughts on Magellan (MFG)

James, Appreciate the daily updates & content. I have ridden MFG to a DCA of circa $18. It is currently the largest holding in my portfolio. I understand that outflows have continued, but surely at some point this will come to an end. Over the longer term (3-5 years), would you envisage MFG to recover & hence consider continue to DCA, especially noting the current dividend yield & potential future recovery? MFG seems to have been battered with continuous bad news at eight years lows with a low P/E. Thanks, Bernie

Answer

Hi Bernie,

MFG is undoubtedly a tough one, its fallen significantly further than most people could have imagined at Christmas, let alone mid-2021 when it was trading above $56. Our best “guess” is the stock rotates between $10 and $20 over the coming years simply because it will be extremely cheap when the outflows slow / stop but at this stage it looks like a speculative play until the FUM numbers plateau and the stock regains investors confidence. We will only dollar cost average when we see relative performance improve, outflows stop and ideally inflows resume.

chart

Magellan Financial Group (MFG)

LAST UPDATED 10/06/2022 12:47

Latest Reports

Afternoon report 16/04/2024

The Match Out: The selling picks up the pace, data drives the weakness

The local market is now on a 4-day losing streak – its worst run since January (5 sessions) – with today being the worst of the batch. As we said this morning, US stocks are leading the weakness, having fallen for six consecutive days; their worst losing streak since June. Equities were on the back foot early following a soft session overnight, stemming from strong-than-expected retail sales numbers, which put pressure on rate cut expectations. Early buyers were hurt today with the market not “feeling right all day”, come the close, 92% of the ASX200 finished down, and not surprisingly, all sectors finished lower today, though there was some relief late in the session as the index closed 27pts / 0.35% off the lows.

Morning report 16/04/2024

What Matters Today: Will banning Russian metals by the LME move the proverbial goalposts?

The London Metal Exchange (LME) has banned the delivery of Russian metal following tough sanctions imposed by the US and UK. The LME is a central market for metals such as aluminium, copper, and zinc. If the supply taps are turned off, prices will likely rise as they did overnight, e.g. over 90% of the aluminium on the LME is of Russian origin. However, prices have a tendency, just like water, to move in the path of least resistance and with plenty of buyers still happy to take delivery of Russian metal, by whatever means, advances are likely to be controlled in nature, assuming they do occur.