Apply this to Magellan. Very little investors are paying attention to Asset Managers not only MFG. Look at Brookfield over in the TSX. They are trading at $70b market cap and they generate $8.3b in operating cash flow. That's a 8.4x multiple. If this was a Saas, BNPL, AI company, the market would be valuing this at 30x multiple not 8.4x.
For companies with...
1. Recurring revenue.
2. Sticky clients.
3. High margins (50-60%) in MFG's case.
4. Highly cash generative business model which consumes little to no capital.
5. Requires little to no capital to grow the business.
...personally, I think asset managers should be valued at a much higher multiple than where they are being priced today.
Compile a list of asset managers not only MFG and you'll see this group of companies are underperforming the market.
MFG Price at posting:
$48.50 Sentiment: Buy Disclosure: Held
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