MFG in the BUY zone, page-423

It could get to $26.... but so what. That's the point I am trying to make with my position on Magellan (and I did an update / response on my FinTwit today too).

If you are a buy and hold type investor, the most important things for you over the long term are the dividends at the point of time of purchase (~8% grossed yield) and the EPS growth over time. The entry/exit multiples and re-ratings are less important, though of course not immaterial. So even if it does go down to $26 (my guess was $28-30 would see a lot of resistance first), it's a slightly better entry point for your dividends. At that price, I'll top-up and add more *IF* I still believe that Magellan can grow through the business cycle. And considering how much they pay out in dividends and my personal hurdle rates for underwriting investments, they only need to grow by ~4% p/a for me to be way ahead. If they shrink slowly over time, well then the thesis is blown up. But right now, the market considers IOOF growth in to the future slightly more bullish than Magellan, and I find that hard to swallow.

GLTAH.