Really appreciate your great spreadsheet updates of FUM growth for various managers. Provides good insight. I notice however you always have a sell sentiment, so here's my counter...
I think you are focusing on FUM too much. I understand these companies are funds managers, so funds under management is obviously somewhat important - but at the end of the day, punters like you and I own companies which are meant to be profitable and make money for their shareholders.
The CAGR, as shown in your sheet for PAC is 3.3x greater than MFGs, yet MFG severely outperformed PAC on the market across the last year. Why?
My opinion...at the end of the day, the companies are here to make money, and PAC did not do that. The EOFY 2020 EPS for PAC was -35.88c...as in PAC lost money, to the tune of $16.3M.
MFG on the other hand, took home $477M in profit for EOFY 2020 and had an EPS of $2.18.
So I would prefer a company with a lower FUM CAGR but positive EPS. Both companies had the same market conditions, and one severely outperformed the other. Now I'm sure that they most likely only lost money in that financial year alone and not in the previous (I assume) - but MFG continues to be profitable in the same conditions.
What are your thoughts?
Also, I'm looking forward to that long awaited MFG sustainable funds and retirement income products. Wonder how much FUM that will generate!
Timtam
P.S: my sentiment is HOLD. Gotta look for that US sell off and aim for MFG sub $55 if you can.
PAC
MFG
MFG Price at posting:
$60.00 Sentiment: Hold Disclosure: Held
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