This report is an updated version of the report published on the 04 August 2022 at 3:44 PM GMT
Section 1: Company Overview and Fundamentals Insights
1.1 Company Overview
Magellan Financial Group Limited (ASX: MFG) is into global investment management & fund operations. The company's business segment includes Funds Management, Fund Investments, Magellan Capital Partners, and Corporate.
1.2 The Key Positives, Negatives, Investment Highlights, and Risks
1.3 Top 10 Shareholders: The top 10 shareholders together form ~34.60% of the total shareholding. Midas Touch Investments Pty. Ltd. and Magellan Equities Pty. Ltd. are holding a maximum stake in the company at ~11.35% and 9.30%, respectively.
1.4 Key Metrics: The net margin stood at 63.1% in 1HFY22 compared to 26.6% of the industry median. Below image depicts the trend of gross margin and total revenue since 2HFY20.
Section 2: Business Updates, Financial Highlights & Dividend History
2.1 Business Updates:
2.2 Results Highlights of 1HFY22 & MFG Funds Under Management: MFG generates cash from management and service fees of around AUD 368.79mn in 1HFY22, up from AUD 322.47mn reported in 1HFY21. The company reported FUM of AUD 60.2bn as of 29th July 2022, under which the majority belongs to global equities of around AUD 33.0bn, followed by infrastructure equities AUD 18.9bn and Australian equities AUD 8.3bn.
Funds Under Management (FUM) Update as on 29th July 2022 is Highlighted Below:
2.3 Dividend History: MFG shows a clear track record of paying a dividend to shareholders. The company issued a dividend of AUD 1.101 per share in March-2022. Under the ongoing capital management initiatives, the management confirms the dividend policy that will follow a payout ratio of 90-95% of profit after tax from the group's funds management business.
Section 3: Key Risks and Outlook:
Section 4: Stock Recommendation Summary
4.1 Price Performance and Technical Summary
4.2 Fundamental Valuation
Valuation Methodology: Pe/Book Value Multiple Based Relative Valuation (Illustrative)
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is August 04, 2022. The reference data in this report has been partly sourced from REFINITIV.
Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.
Technical Indicators Defined: -
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
Disclaimer - This report has been issued by Kalkine Pty Limited (ABN 34 154 808 312) (Australian financial services licence number 425376) (“Kalkine”) and prepared by Kalkine and its related bodies corporate authorised to provide general financial product advice. Kalkine.com.au and associated pages are published by Kalkine.
Any advice provided in this report is general advice only and does not take into account your objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your objectives, financial situation and needs before acting upon it.
There may be a Product Disclosure Statement, Information Statement or other offer document for the securities or other financial products referred to in Kalkine reports. You should obtain a copy of the relevant Product Disclosure Statement, Information Statement or offer document and consider the statement or document before making any decision about whether to acquire the security or product.
You should also seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice in this report or on the Kalkine website. Not all investments are appropriate for all people.
The information in this report and on the Kalkine website has been prepared from a wide variety of sources, which Kalkine, to the best of its knowledge and belief, considers accurate. Kalkine has made every effort to ensure the reliability of information contained in its reports, newsletters and websites. All information represents our views at the date of publication and may change without notice.
Kalkine does not guarantee the performance of, or returns on, any investment. To the extent permitted by law, Kalkine excludes all liability for any loss or damage arising from the use of this report, the Kalkine website and any information published on the Kalkine website (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine hereby limits its liability, to the extent permitted by law, to the resupply of services.
Please also read our Terms & Conditions and Financial Services Guide for further information.
On the date of publishing this report (referred to on the Kalkine website), employees and/or associates of Kalkine and its related entities do not hold interests in any of the securities or other financial products covered on the Kalkine website unless those persons comply with certain safeguards, procedures, and disclosures.
Kalkine Media Pty Ltd, an affiliate of Kalkine Pty Ltd, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.