Magellan Global Trust

Updates on Weekly NAV:Magellan Global Trust (ASX: MGG) is a listed investment trust, which makes an investment in global equities. Recently, MGG via a release dated 12^th Aug 2019 announced that the net asset value of Magellan Global Trust stood at $1.8492 per unit as at 9^th Aug 2019 in comparison to the $1.8487 per unit NAV as at 2nd Aug 2019. The following picture provides an overview of Distribution Reinvestment Plan:


Distribution Details (Source: Company Reports)

In another updates, MGG announced that John Eales had made a change to his holdings in the trust by acquiring 4,837 Units in Magellan Global Trust at the consideration of $1.7628 per unit. In the document titled “Annual Fund Review 2019”, MGG stated that the global stocks witnessed a rise in the 12 months to June 2019 after companies posted higher-than-expected earnings.When it comes to the portfolio of MGG, it posted a return of 15.9% for the 12 months after fees. MGG added that the stocks which performed best were Starbucks, Microsoft, HCA Healthcare, Visa, Mastercard and Yum! Brands.

Future Aspects:As per the release dated 1^st July 2019, Magellan Asset Management Limited advised that the target cash distribution per unit of Magellan Global Trust for six-month period ending December 31, 2019 happens to be 3.3 cents per unit.Magellan Global Trust’sportfolio performance depends on IT sector companies such as Alphabet Inc Class C, Facebook Inc-A and Microsoft Corp. Hence, the broader performance of the IT sector might influence the performance of Magellan Global Trust moving forward.

Stock Recommendation:Coming to the past performance, MGG’s stock provided returns of 2.86% and 10.43% in the time period of three months and six months, respectively. The events related to the US and China trade war might affect the broader IT sector. Hence, considering the above-stated facts and current trading levels, we maintain our “Hold” rating on the stock at the current market price of A$1.830 per share (up 1.667% on 13^th Aug 2019).
 

MFF Capital Investments Limited
 

Changes in Board and Audit and Risk Committee: MFF Capital Investments Limited (ASX: MFF) makes an investment in a portfolio of exchange listed international and Australian companies with attractive business characteristics. Recently, the company with the help of a release stated that its weekly net tangible asset per share stood at $3.348 pre-tax and $2.755 post-tax as at 9^th Aug 2019. The company further stated that Peter Montgomery has made a change to his holdings by acquiring 30,000 Fully Paid Ordinary Shares at the consideration of $2.99 per fully paid ordinary share.

As per the release dated 31^st July 2019, the company announced some changes to its Board and Audit and Risk Committee.The company stated that Mr Richard Warburton AO LVO has resigned from the post of Chairman and a Director of the Company. The Company has appointed Ms Annabelle Chaplain as Chairman in addition to her role as Independent Non-Executive Director.

For the year ended 30 June 2019, the company recorded a net profit after tax (NPAT) of $218.6 Mn and the Pre-tax profit of the MFF stood at $312.2 Mn.The following picture provides an idea of MFF’s total net investment income:


Profit & Loss Statement (Source: Company Reports)

What to Expect:  The company’s balance sheet and financial flexibility remain strong. It continues to maintain healthy levels of interest cover, low risk levels relating to portfolio liquidity and minimal contingent liabilities. MFF is making an investment in equities, with a focus upon the equities of non-Australian domiciled companies and this is anticipated to continue.

Stock Recommendation:At CMP of $3.040, the annual dividend yield of the company stood at 1.14%. The overall health of the global economy is very crucial with respect to the company’s investment in the equities. The trade battle between the United States and China could affect the broader business environment and can also influence the sentiments of the market players. As per ASX, the company’s stock price is trading towards its 52-week higher levels of $3.180 with PE multiple of 15.68x. Hence, in view of aforesaid facts and current trading levels, we maintain our “Hold” rating on the stock at the current market price of A$3.040 per share (down 1.299% on 13^th Aug 2019).

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