Great thread. here is my two bobs worth for what it's worth. so we have had a fall of about 30%. surely the market has got it wrong. the stock has got to be undervalued. this has got to be the buy of century! well, you know something it probably is not. I am always astounded at how accurate the market actually is at valuing stocks. it rarely seems to get it wrong I find. the price action of MFG seems to mirror other active fund managers like PTM, and both of them are near 5 year lows on the charts. Dig a bit deeper and you can see why. Most recently the FUM under management figure was $113 bn St James Place's fund under Magellans management came out at $23.3bn which is about 21% of the total. Last years earnings were about $2.11 80% of this figure is about $1.70 So what sort of growth can we look forward to into the future for this company. well, taking into consideration disruption from ETFs, probably no growth at all. But there is a dividend, probably in the vicinity of 10%, so lets give the company a PE of 10. So what's the company worth 10 x $1.70 or let's say about $17 You could debate whether the PE is 10, 11, 12 ... but this calculation seems to be born out by price targets that came out today. they are all about $17 to $20 Morgans $24.15 Hold Mac $20.00 Neutral UBS $17.00 Sell Morgan Stanley $17.50 Underweight. Average Price $19.66 But does that mean anything. Probably not. most analysts are sheep who do what everyone else in the industry is doing and usually everyone is completely wrong. I read on article about target prices today which had analysts getting it right 20% of the time and at other times just 45% of the time, which in the end is just a coin toss after all ie 50-50 getting heads or tails.
MFG Price at posting:
$20.31 Sentiment: Buy Disclosure: Held
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