Magellan Financial Group Ltd

Strong FY 18 Performance & Decent inflows: Magellan Financial Group Ltd.’s (ASX: MFG) stock has risen 10.11% in three months as on November 06, 2018 after the company for FY 18 has reported 37% growth in the group profit after tax, that excludes the MGG net offer costs and amortization, to $268.9 million. The average funds under management in FY 18 have increased to 59 billion and there was 26% rise in Management & services fee revenue in FY 18 to $385.8 million. As at 28 September 2018, MFG’s Funds Under Management slightly fell to A$74,545 million versus Funds Under Management of A$ 74,612 million at 31 August 2018; but still are maintained at decent levels. Total FUM as at 31 October 2018 was A$ 72,981 million while it experienced net inflows of $322 million (including net retail inflows of $73 million and net institutional inflows of $249 million). While the group reported a fall in FUM, the inflows are continuing, and lately, Director Brett Cairns bought 10,000 shares of the company’s stock. The company earlier witnessed net inflows of $86 million, which included net retail inflows of $60 million and net institutional inflows of $26 million in September. Meanwhile, MFG has appointed Dr Brett Cairns as the Chief Executive Officer and Managing Director and Mr Hamish Douglass has been appointed as Chairman of the Board, effective from 5 October 2018. Additionally, MFG increased the total cash dividend payout by approximately 20% per annum. In FY 18, total dividends increased by 57% to 134.5 cents per share. On the other hand, MFG stock is trading at the price of level $27.13, and has support at $22.8 and resistance at $29. Based on the foregoing, we give a “Buy” recommendation on the stock at the current price of $27.13.

FY 18 Financial Performance (Source: Company Reports)
 

Macquarie Group Ltd

Expects FY19 result to be up approximately 10 per cent on FY18: Macquarie Group Ltd.’s (ASX: MQG) stock has risen 10.4% in six months as on November 07, 2018 after the company for the first half of FY 19 posted 8% rise in the net operating income to $A5,830 million on 1H18, however its total operating expenses rose 12% to $A4,125 million on 1H18. Further in 1H FY 19, the combined net interest and trading income rose to $A2,229 million, mainly due to the increased contribution across the commodities platform and growth in deposit and Australian loan portfolios in BFS. This was however partially offset by reduced income from early repayments, realisations and the reduction in the size of the CAF Principal Finance portfolio. Moreover, during 1H 19, Macquarie Asset Management recorded a net profit contribution of $A762 million, which is down 36 per cent from $A1,189 million in 1H18. Corporate and Asset Finance’s net profit contribution fell 29% to $A437 million for 1H19. MQG still expects FY 19 result to be up approximately 10 per cent on FY18. Further, MQG has appointed Jillian Broadbent AO to the Macquarie Group Limited and the Macquarie Bank Limited’s board as an independent non-executive director, effective from 5 November 2018. Meanwhile, MQG stock is trading at a P/E of 15.66x. MQG stock is trading at the price of level $120.81, and has support at $110 and resistance at $129. Based on the foregoing, we give an “Expensive” recommendation on the stock at the current price of $ 120.810.
 

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