Magellan Financial Group Ltd MFG

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A$8.91 +0.22 (2.53%)

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As of Apr 29, 2024 1:49am Delayed Price Open

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Company Report

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Australia Asset Managers: Stabilizing but Still Weakening Against Passive Investments (Corrected)

Shaun Ler, Mathew Hodge Apr 12, 2024

This note replaces the original version that accompanied our report "Industry Pulse - Australian Asset Managers: 2024 Q1," published March 14, 2024. We were recently made aware of inaccuracies in the net flow data for certain unlisted managers in that original report. As for our investment conclusions, we stand by our key assessments: the fair value estimates, moat, uncertainty, capital allocation, and star ratings for our Asset Manager coverage.

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Price vs Fair Value

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MFG is trading at a 5% discount.

Price

A$9.16

Apr 24, 2024

Fair Value

A$3.50

Oct 25, 2023

Uncertainty

Very High

1-Star Price: A$17.80
5-Star Price: A$4.90
Economic Moat: Hwnl
Capital Allocation: Lgblgpbdp

Bulls Say, Bears Say

Bulls

The sheer scale of Magellan’s funds under management means it is still capable of maintaining earnings from the compounding of investment returns despite periodic outflows.

Bears

Most of Magellan's earnings come from a few funds, meaning it has a high reliance on key investment personnel and the performance of its main funds. Should key people leave, or its main funds underperform for a prolonged period, outflows could be material.

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Trading Information

Previous Close Price: A$8.69
Day Range: A$8.90–9.06
52-Week Range: A$6.06–11.04
Bid/Ask: A$8.91 / A$8.92
Market Cap: A$1.61 Bil
Volume/Avg: 207,330 / 912,028

Key Statistics

Price/Earnings (Normalized): 9.67
Price/Sales: 3.15
Dividend Yield (Trailing): 7.60%
Dividend Yield (Forward): 6.45%
Total Yield: 7.76%

Company Profile

Magellan Financial Group is an Australia-based niche funds manager. Established in 2006, the firm specializes in the management of equity and infrastructure funds for domestic retail and institutional investors. Magellan has historically been particularly successful in winning mandates from global institutional investors. Current FUM is split across global equities, infrastructure and Australian equities.

Sector: Financial Services
Industry: Asset Management
Stock Style Box: Small Core
Total Number of Employees: 135
Website: https://www.magellangroup.com.au

Competitors

Valuation

Metric	MFG	PPT	PTM
Price/Earnings (Normalized)	9.67	11.76	7.76
Price/Book Value	1.68	1.20	1.92
Price/Sales	3.15	2.12	3.00
Price/Cash Flow	17.18	12.14	8.56

Price/Earnings

MFG

PPT

PTM

Financial Strength

Metric	MFG	PPT	PTM
Quick Ratio	—	0.90	—
Current Ratio	—	1.43	—
Interest Coverage	—	2.26	—

Quick Ratio

MFG

PPT

PTM

Profitability

Metric	MFG	PPT	PTM
Return on Assets (Normalized)	14.97%	3.30%	22.10%
Return on Equity (Normalized)	17.86%	5.67%	24.14%
Return on Invested Capital (Normalized)	—	5.59%	—

Return on Assets

MFG

PPT

PTM

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