I still think 475-500m net profit is realistic. now on a forward multiple of around roughly 12.
Low PE Ratio's are indictive of a decline in future earnings. But what type of decline are we talking here? like loans fund investments can be very sticky. I saw above someone said the div yield is now over 5%, I reckon the forward yield is closer to 7%. Is it reasonable to assume Magellan FUM remains stubborn and at the current price has the capacity to pay over 20% in dividends over the next 3 years based on the current share price.
of course momentum is important. The market will rank a stock higher if its earnings for the next 5 years will be 1,2,3,4,5, relative to a company whose earnings will be in reversal from 5,4,3,2,1, even though from a time value of money perspective the latter is better.
That's why I am positive n Magellan - its capacity to pay out near term dividends. This company accrues its fees daily. So despite the net outflow, its FUM is growing and all that means is near term earnings will be better.
MFG Price at posting:
$31.08 Sentiment: Buy Disclosure: Held
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