MFG has been a great stock since its listing. This year, it has also shown an interesting attribute : it is quite defensive. This is not that obvious for a fund manager, but can be explained in their case by the fact that its main strategy (unhedged global equity) had 2 great bets : betting on the USD and the technology sector. As a result, one of their main funds (MGE) has a positive absolute performance since the beginning of the year which explain why the company has been able to get net inflows during that period. It remains difficult to put a limit to the potential of growth for Magellan AUM. It still has a large potential of growth for its international equity strategy, as long as they get a regular good performance. They also have other potential sources of growth with their domestic equity business, their expected Magellan Retirement Fund and potential acquisitions. Not obvious to value the company, but they will probably comes back to the 70 $ level when their AUM comes back to their previous high (AUM of 97 bn $ in April vs 104 bn $ in January).
MFG Price at posting:
$57.26 Sentiment: Buy Disclosure: Held
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