MFG - Magellan Financial Group

[Lizard]

This share has waited too long for its own thread. Had a bit of discussion here (http://www.sharetrader.co.nz/showthread.php?5585-MFF-Magellan-flagship-fund&p=300990&highlight=mfg#post300990).

But a picture is worth a 1000 words...

http://img.villagephotos.com/p/2006-8/1204598/mfg.png.jpg

[mark100]

Hi Liz, I don't hold but do follow a bit after their generosity in 07. I was able to load up with $500 of shares in MFG and NPH under multiple HINs and then applied for a stack of shares at 97c when the shares were trading at $2. My second best profit for that year after the Platinum IPO!

Fast forward to 2010 and they do seem to be steadily buiding a solid funds management business. Lots of cash and liquid investments backing them as well

[Lizard]

Hi Mark. Yes remember you were watching this one and brought to attention their awkward situation in relationship to NPH early on. Combined with listing their Flagship Fund, unhedged, at virtually the worst possible time, they initially must have destroyed a bit of investor goodwill for those less canny than yourself!

However, the hangover seems to have worn off, as their ability to build FUM this year has been the most impressive part of the operation. FUM at 30 Jun 2009 was $393m. By 30 June 2010, it was $1,147m. More recently, 31 July was $1,320m. While much of this growth has come from low-fee, wholesale mandates, it is at least building a critical mass and the funds management branch should produce a small profit this year ($4m+?). Probably also a gain on investments of around $11m that will get reported in comprehensive income.

It will be interesting to see what clues can be gleaned from the annual report this year on the level of those wholesale mandate fees. I currently value at $1.30-$1.40 (though I'm no expert in valuing Fund Managers), so wouldn't consider it exceptionally cheap. However, it is one company that I feel has the potential to build value as a long term buy-and-hold.

[COLIN]

This share has waited too long for its own thread. Had a bit of discussion here (http://www.sharetrader.co.nz/showthread.php?5585-MFF-Magellan-flagship-fund&p=300990&highlight=mfg#post300990).

But a picture is worth a 1000 words...

http://img.villagephotos.com/p/2006-8/1204598/mfg.png.jpg

I stumbled across this one a couple of weeks ago, Liz, and bought in at 113, so impressed was I with the trend and the relative buying strength in particular. Growth in FUM is also quite dramatic.

[Lizard]

While much of this growth has come from low-fee, wholesale mandates, it is at least building a critical mass and the funds management branch should produce a small profit this year ($4m+?). Probably also a gain on investments of around $11m that will get reported in comprehensive income.

I wasn't too far off on the funds management profit - NPAT $3.7m - but the gain on investments was a bit underwhelming at only $6.6m before tax. Since the $11m I calculated above came from published prices and half-year holdings, I can only presume that they managed to incur costs and losses in buying more of their own funds (MFF and MGF) during the second half. Until the full annual report is available, it is difficult to tell.

I was interested to find that (given some of the caution in their recent presentations) they seem to have invested heavily in their own MFF and MGF funds during the last 6 months.

Overall, I still like for the long term, but any impetus for a share price rise over the next 6 months may need to be driven more by a growth in value of their investment assets rather than their funds management value. I think $7m npat for funds management would be likely for 2011- combined with $100m of investment assets, the current market cap of $187m (at $1.20) is probably about right for now.

[Lizard]

...their ability to build FUM this year has been the most impressive part of the operation. FUM at 30 Jun 2009 was $393m. By 30 June 2010, it was $1,147m. More recently, 31 July was $1,320m.

After a slowish patch in FUM growth during August and September, MFG added over $250m in FUM during October, taking them to $1,749m at month end. The chart did not look so good over the last two months, so may have kicked a few out of the trend, but is back on the up again at $1.34. Also helped by a bit of a recovery in the $A value of their US listed investments.

[Lizard]

Leapt to $2,166m FUM during November, so a big $417m gain for the month. Good to see reasonable net inflows of around $100m that aren't via wholesale mandates and therefore attract full fees.

They have an impressive ability to attract funds (despite the flagship fund setting a rather tattered signal).

Current sp $1.47.

[Lizard]

Now at $1.61 and sell depth on the thin side. MFF (their flagship fund) is getting some pick up too, with the current Dow rally less dissipated by currency movements than in the past.

[Lizard]

Okay, I'm not entirely sure what they are trying to tell me, but today's monthly NTA announcement for MFF somehow says it all :)

There is increasing evidence of emerging bubbles being fanned by low interest rates and other highly stimulatory monetary and fiscal policies. Geopolitical and inflationary risks are rising with unsustainable combinations of rising commodities, rising basic costs of living, increasing income disparities, high unemployment, record budget deficits, low interest rates with fanaticism and restrictions on freedom being played out in a world of mobile broadband and social networks.

[winner69]

Okay, I'm not entirely sure what they are trying to tell me, but today's monthly NTA announcement for MFF somehow says it all :)

Sounds like the end of the world is nigh

Did you read the whole 4 pages Liz ... did it take 4 pages to say that the NTA of the fund was 78 cents or something ..... I would think that almost every 'buzz word' invented was in that report .... amazing

Obviously a fund for the sophisticated investor .... one who can comprehend the reports

Intersting selection of stocks in the portfolio .... you would have to think if you lost too much in this fund the world would ahve to be a pretty miserable place ... hope that wasn't what he was trying to say

[bermuda]

They bought BUL last week and now have over 5% of the company. A good sign for BUL.

[Lizard]

Intersting selection of stocks in the portfolio .... you would have to think if you lost too much in this fund the world would have to be a pretty miserable place ... hope that wasn't what he was trying to say

You know, I regularly read the MFF write-ups and (despite the fact they lost me somewhere between fanaticism and social networks!), they are usually pretty bang-on. What gets me is that they can be right - but they never seem to make any money from being right. I think their launch date was a bit ahead of "Pie Funds" (http://www.sharetrader.co.nz/showthread.php?8336-Pie-Australasian-Growth-Fund-Mike-Taylor-1), so they should have had a bit of an advantage - but while Pie has turned a dollar into $1.95, they have managed to turn it into 74 cents...

[voltage]

Anyone investing in this fund. I have money in this fund, sounds great invests in top global brands but where is the performance?? Does anyone know their management fee? Is there another fund OR ETF that focuses on the same objective.

[Lizard]

Maiden dividend (1.5cps), so that is encouraging. Result looks close to expectations. Yet to crunch the numbers to see where it heads - probably depends a lot on how their investments in blue chip America play out in the next 12 months.

The previously announced hedged version of the Magellan Global Fund would have been good to have a little sooner.

Still like this as a long term buy and hold. Got a bit expensive for a while, but back to something I consider more realistic here at $1.24.

[Lizard]

Now at $1.41 and looking set for a positive result - just announced $4.8m of performance fees for last half, vs $7000 in pcp. Their holding in MFF won't have gained much for the six months on mark-to-market, but underlying result in MFF was improved and price now on the rise.

Still fair buying at these levels.

[voltage]

not too sure whats wrong with this listed trust. Top holdings, been out trumped by dow jones which hold similar top global stocks. High management fees maybe??

[Lizard]

Think you are referring to MFF rather than MFG.

Biggest issue for them seems to be that AUD is quite highly correlated with the Dow, so forex moves cancel out most big moves on the Dow with this being unhedged. Tried to find a chart of DJIA in AUD, but seems a comparison is the best I can get.
3816

Given they listed in Dec 2006, a 5 year chart is pretty close.... so 0% gain on the DJI and a 27% fall in the value of USD vs AUD...would suggest a benchmark of 73c NAV without any allowance for fees. At 81.7cps NAV, they are probably outperforming benchmark? Plus the gap against NAV has widened (now 15.5% discount), so that hasn't helped the performance of the shares.

[Lizard]

Now at $1.41 and looking set for a positive result - just announced $4.8m of performance fees for last half, vs $7000 in pcp. Their holding in MFF won't have gained much for the six months on mark-to-market, but underlying result in MFF was improved and price now on the rise.

Still fair buying at these levels.

And now nearly back to highs of a year ago at $1.76 - probably close to fair value, although I can justify prices up to $2.23 at this point. Fairly comfortable with these as a buy and hold investment though. The funds management business performing well (despite the MFF fund simply trading at an ever-increasing discount as the NAV rises). Now through the $3bn mark on FUM and expanding into institutional funds in the US and Europe.

Could moan about the increase in staff compensation, but 1.5cps interim div has sweetened my mood. :)

[steve fleming]

Hi Liz

Did you see MFG has bought into Roger Montgomery's fund management company, Montgomery Investment Management?

I don't like the guy, but given what a good salesman he is (which is pretty much what funds management comes down to), I'd imagine he secures some pretty good FUM.

[Lizard]

Hi Liz

Did you see MFG has bought into Roger Montgomery's fund management company, Montgomery Investment Management?

I don't like the guy, but given what a good salesman he is (which is pretty much what funds management comes down to), I'd imagine he secures some pretty good FUM.

That surprised me, Steve! It took me a while to find this (http://blog.rogermontgomery.com/wp-content/uploads/2012/02/20120224_Montgomery_Media_Release.pdf). Nothing from Magellan that I could find.

To be honest, it is not a mix I would have picked. Seems a bit like mixing Destiny Church with the Anglicans - if you know what I mean.

[Lizard]

And now nearly back to highs of a year ago at $1.76 - probably close to fair value, although I can justify prices up to $2.23 at this point. Fairly comfortable with these as a buy and hold investment though. The funds management business performing well (despite the MFF fund simply trading at an ever-increasing discount as the NAV rises). Now through the $3bn mark on FUM and expanding into institutional funds in the US and Europe.


MFG still keeping my faith with a move up to $2.12 in recent times following a strong March in terms of both FUM growth and fund performance. Retail FUM has increased at a faster rate than wholesale over the past 12 months too (>50% increase).

Not so cheap now, but might have the momentum to hit $2.50 this run. Not one I'm planning to sell though.

[Lizard]

Still keeping the faith....

4048

[Lizard]

Not so cheap now, but might have the momentum to hit $2.50 this run. Not one I'm planning to sell though.

Okay, well now I am going to do that analyst-thing and just keep moving my valuation up behind the share price... punched the numbers on the latest result and out came a magic valuation of $2.77... and whaddya-know but the share price is at $2.75, with buyers at $2.76...

... every good analyst needs to know when it's time to kick-back and just ride the trajectory.

[Lizard]

Okay, well now I am going to do that analyst-thing and just keep moving my valuation up behind the share price... punched the numbers on the latest result and out came a magic valuation of $2.77... and whaddya-know but the share price is at $2.75, with buyers at $2.76...

... every good analyst needs to know when it's time to kick-back and just ride the trajectory.

Another 2 months and now $3.92 and has more than doubled in 6 months...

Still holding, but expecting a sharp pullback at some stage - though eventually expect this to get through 10-bags for me from the 57cps buy of a few years ago (though majority of mine bought closer to 80cps).

[Lizard]

Up to $4.40 today after announcing a new £1.5bn global equity mandate, so another leap closer towards the eventual ten-bagger I expect this to be. Wish I had company here, but guess there haven't been many pullbacks to enter on!

[Snow Leopard]

Up to $4.40 today after announcing a new £1.5bn global equity mandate, so another leap closer towards the eventual ten-bagger I expect this to be. Wish I had company here, but guess there haven't been many pullbacks to enter on!

Perhaps we don't want to admit that despite your many posts we did not board the train. :cursing:

Congratulations & best wishes
Paper Tiger

[ratkin]

Yeah

I invested in the monkey (MFF) and forgot about the organ grinder :-(

[voltage]

I am in the listed version MFF should one switch to MFG

[pedro.nz]

4202
Suspect you are not alone Mr Lizard - I was waiting for a pullback but this one seemed to keep on trucking so I bought some a few weeks ago.
So far has not done the usual thing and gone backwards as soon as I bought in :mad ;:

[Lizard]

Great to have some company on this thread. :) I wouldn't want to promote it too much at this point - not cheap here - but another $300m added to FUM in October is worth noting.

I once said to someone that I would try not to sell a single share until they reached $10bn in FUM, as I believe they can easily get there and still be priced for growth. At $4.8bn, they are almost halfway there by value (not including the St James mandate) and may well get there within 2 years on current trends.

[Lizard]

http://www.smh.com.au/money/investing/hot-stock-magellan-financial-20121127-2a52p.html

Strong push through $5 today (currently $5.13). Put on over $700m in FUM for November - not sure if that included any funds from St James, since they weren't supposed to flow through till 2013.

[Joshuatree]

Congrats liz on the big rise in magellan this year ,topped with the BIG rise yest and the bumper xmas hamper handout, WOW.

[pedro.nz]

http://www.magellangroup.com.au/wp-content/uploads/2012/12/20121214_In-Specie-Distribution-Dividend-Policy.pdf

[Joshuatree]

Worth buying in cum; now Liz or anyone else in? .Or Ex, with franking credits unable to be utilised ,etc.

[voltage]

i am confused what is the difference between MGF and MFF

[macduffy]

I'm not a shareholder or unitholder but my understanding is that MFF is the listed management company, MGF is one of their funds.

[macduffy]

I'm not a shareholder or unitholder but my understanding is that MFF is the listed management company, MGF is one of their funds.

Please disregard my last post - which doesn't seem accurate.

:confused:

Just as well I've never bought any!

[Joshuatree]

MFG magellan Financial group is a specialist Funds management business. It manages global Equities and global listed funds and infrastructure strategies for high net worth retail and institutional investors. Magellan Flagship fund MFF is ASX listed and managed by MFG. Dont know how much of MFF is owned by Parent MFG

[Fred114]

Around 6% SP drop today on a market announcement of FUM at 31 Jan of 6.9Billion......up from 6.5Billion from 31 Dec....seemed a bit overpriced perhaps....

[Lizard]

I thought this went ex-bonus on the 13 Feb, so expected more of a drop end of week to cover the approx 40cps of MFF and MFFO distributed. However, still sitting up at $7.16... are they in-line to join ASX200?

I've been meaning to hold all for $10, but not sure I can keep my nerve at this rate as the "reduce" instinct is screaming now my position size is over 15% of portfolio.

[pedro.nz]

Has not really missed a beat for a long time so follow the trend while it lasts Liz :D
4330

[Dej]

Has not really missed a beat for a long time so follow the trend while it lasts Liz :D
4330

*&#@# Thats a good chart!!

[Lizard]

Good advice there KW. Now 10% higher at $7.93. :)

[Lizard]

Was just filing the paperwork for my MFF/MFFO distribution when something didn't add.... and then it struck me... I actually bought 1000 more MFG shares than I somehow entered in my spreadsheet back in 2009... like finding $7,500 under the mattress!

Must be time for a beer! :cool:

[Lizard]

I sold a few today at $6.88 while re-balancing. Got it back to a % of portfolio I can sleep with.

[Lizard]

They reported a pretty big increase in FUM for the month of May - up nearly 14% in one month, plus another $400m mandate to kick in for June. Plus their global strategy looking good as AUD falls.

[Snow Leopard]

Dear lord, a nearly 10 bagger over a year as a fund manager. WTF?!?! :scared:

Go find a chart for MFGOC :scared:

Best Wishes
Paper Tiger

[Lizard]

Go find a chart for MFGOC :scared:

Best Wishes
Paper Tiger

Doh! You just made me hit myself over the head for missing these and being satisfied with the MFG!

I did have a few freebie MFGOA (2009/$1.30) and MFGOB (2011/$1.30) from the MFF IPO which I sold at a fortuitous time. However, the MFGOC (2016/$3.00) were issued back in 2007 as part of the NPH off-market takeover, resulting from the management fee debacle that Mark100 originally pointed out...Chairman, Chris Mackay owns about a third of them.

The only minor consolation for not owning them is that the lack of liquidity in the past year probably would have made them difficult to buy while they were still out of the money - about $10k worth changed hands around 50cps and around $150k at $1.50 - a level at which they wouldn't have outperformed the MFG heads over a full year.

On the happy side, I still own the freebie MFFO that were dished out last year on my MFF, topped up with some MFF and MFFO distributed by MFG... although the sceptic might call this more of a subdivision of an existing entitlement.

[Lizard]

Trying out for the big $10 barrier for the first time today... would expect a few attempts though.

[Lizard]

And another $1.8bn in funds added (14% again) in June to take them to $14.7bn under management... along with a quadrupling of performance fees in this half over prior.

I think they will manage a close above $10 this time.

[Lizard]

$11.20. I think that, counting the MFF, MFFO and dividend distributions, this has now become my first 20-bagger. :)

[blackcap]

$11.20. I think that, counting the MFF, MFFO and dividend distributions, this has now become my first 20-bagger. :)

well done Liz! Good feeling huh! I have 2 ten baggers to date but the 20 is still elusive.

[Gonzo]

$20 to anyone awake at the end of this presentation by Hamish Douglas

http://www.brrmedia.com/event/111288/partner/directbroking

[Toulouse - Luzern]

$11.20.
I think that,
counting the MFF,
MFFO
and dividend distributions,
this has now become my first 20-bagger.
:)



“I wish I'd said that,” said Oscar Wilde once, admiring a witticism of James McNeill Whistler's, and Whistler replied: “You will, Oscar, you will!"

I wish that all Sharetrading posters will get to write something along Lizard's inspirational lines at least once in a lifetime ...

[Lizard]

A good result - which was to be expected... a bit stronger than I'd expected, but I hadn't spent a lot of time on trying to make predictions here. Big dividend increase as promised and can probably expect more next year.

I don't think we're likely to see it turn multi-bag in a year again, but still seems room for attractive growth and divs over next 12-24 months - dependent on markets in general, $15 seems obtainable. (However, I will probably be reducing as it goes now to re-balance into other opportunities.

I'm reassured by the fact that FNZ Capital still doesn't have broking reports on MFG!

[Lizard]

Chris Mackay steps down from MFG to focus on MFF. Share price, not surprisingly, a little subdued on the news.

[Lizard]

With Packer now also looking to sell his stake at $10.68, I may have been reducing at the right time in the last 48 hours...
http://blogs.wsj.com/moneybeat/2013/08/21/billionaire-james-packer-looks-to-sell-stakes-in-magellan-seek/

... still have about 25% of original holding though.

[Joshuatree]

Now $10.84, tempting !!

[baller18]

Hmm... does it seem cheap at the current SP?
Their profit quadrupled but yet it goes down on good news?
They have an excellent team running the show, FUM growth, future profit future looks real strong

[Joshuatree]

Got as low as $10.15 finished @ $10.40. Watching.

[baller18]

http://www.americanbankingnews.com/2013/08/19/magellan-financial-group-ltd-given-overweight-rating-at-jpmorgan-chase-co-mfg/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+AmericanBankingNews+%28Americ an+Banking+News%29
Wow! Jp Morgan have an objective price at 48.50 really? Giving it a overweight rating... More credible than Morningstar!!!

[baller18]

Just reading up on hamish Douglas, whoa!! I can see mfg going higher and higher, but 48.50??

[baller18]

how in gods name did they get that valuation?
I am not too sure... lol
However, reading up on hamish douglas, I wouldn't be surprised if it reaches $30 by the end of next year to be honest...

[baller18]

Wow, I am so psychic. Someone tell the XRO bulls, and we'll hit that valuation next week :p
Do you see it reaching $48.50 in a few years, what is your SP outlook for MFG kw? thanks

[baller18]

Thanks heaps for your time KW!!

[Joshuatree]

$10.34 and dropping below packers exit price.

[Joshuatree]

Cheers KW. Watching for an entry.

[Lizard]

Finally back through $12 on coverage from a global analyst. Last time here was July when it spiked over a week (high about $12.87, I think).

I re-balanced these back to my "average" aussie hold size so I could sleep at night, but still means I am happy to see the remnants on the move again.

[Lizard]

Initial response to half year results was not enthusiastic, but has since picked up the pace to take on new highs - currently $13.59.

Priced for growth, but ongoing high growth rate seems assured (assuming market doesn't melt down). Some fantastic results for the new Magellan High Conviction Fund will likely see this option well supported and the UK seeing increasing funds from St James as well as growth in the UK based Global Fund.

[Lizard]

Price has see-sawed for the last year. Back at $12 last night on the back of the announcement of $1.3bn FUM inflow so far in July.

[Lizard]

Huge growth in FUM for November and pushed through $30bn, with a good chunk coming from growth in underlying investment value. Bodes well for possible performance fees. Share price up to new highs today and currently at $15.75.

[mark100]

Unreal performance Lizard. From $0 to $30b FUM in around 8 years (with a GFC in the middle of that)!

[Lizard]

Pushing on close to $20/share today ($19.93 the high). Would expect resistance/consolidation here for a bit?

Still have a few left from the original purchase - might have been nicer to have kept them all and have had the problem of being vastly over-weight... but my first strategy is always to keep my nerves intact.

[Fred114]

Magellan Global Equities Fund to list later this week, 5 March, as an ETMF.....

http://www.goodreturns.co.nz/article/976502713/magellan-launches-listed-version-of-fund.html

[Lizard]

I have finally sold the last of my MFG at $17. Has been a good investment, but happy to lock in gains here and have cash for future investments.

[Lizard]

Am short MFG at present. Its just broken through its 200 day MA, and the latest fund update shows money has started to flow out. The worse the market ructions get, the more funds will be pulled.

I presume you closed this one out, KW? Market seemed to like FY result. Still happy to sit out, with markets lurching in US.

[macduffy]

Magellan increasing its cash position.

http://www.afr.com/brand/market-wrap/douglass-readies-for-market-turmoil-and-world-domination-20150811-giwq1o?stb=twt&utm_source=Trending+on+Livewire+%22The+Morning+Wir e%22&utm_campaign=dc58e19237-Trending+on+Livewire&utm_medium=email&utm_term=0_1911ffeed5-dc58e19237-82636925&mc_cid=dc58e19237&mc_eid=9f402457b0

[NZSilver]

I bought into this on Friday, after results it gapped down 1-2% per day. First time I've owned it. Positive are - I think Hamish and the team will turn it around as only short term issues, approx 6% yield, FUM still growing...hard to tell if that's because markets going up or if there are inflows, has side investments - barren joey and a couple of others. Negatives - chart is ugly, nearly at covid lows, move to ETFs/passive management, possibly might see fund outflows. Basically they have been conservative (held cash) over covid and have underperformed as markets have bounced back up. However they still have 118bil under management and have some new fund products too. Anyway I liked the value, so I bought in, I would be interested in others thoughts.

[Gonzo]

I bought into this on Friday, after results it gapped down 1-2% per day. First time I've owned it. Positive are - I think Hamish and the team will turn it around as only short term issues, approx 6% yield, FUM still growing...hard to tell if that's because markets going up or if there are inflows, has side investments - barren joey and a couple of others. Negatives - chart is ugly, nearly at covid lows, move to ETFs/passive management, possibly might see fund outflows. Basically they have been conservative (held cash) over covid and have underperformed as markets have bounced back up. However they still have 118bil under management and have some new fund products too. Anyway I liked the value, so I bought in, I would be interested in others thoughts.

I was in on the float of MFF so was granted 1 MFG for every 6 MFF
Been a wild ride Hamish is pretty savy, happy to stick with him

[winner69]

Head honcho resigns for personal reasons and has left the ship …and negative response from share market

[nztx]

Head honcho resigns for personal reasons and has left the ship …and negative response from share market


to be frank - the ASX graph looks like a slope downwards from Feb 20 peaks to resume around 2018 levels :)

what does the market not like about this one overall for that patterning ? ;)

[NZSilver]

bought in a $37 but things have deteriorated. jumped in to early but there is plenty of value here. Pe of approx 12

[NZSilver]

Hamish has broken up with his missus, thing keep getting worse for mfg.

[ratkin]

Maybe the Two things are connected. Someone been playing with someone elses woman

[NZSilver]

trading halt - looking like they are going to loose a big insto client

[NZSilver]

Ugly, I'm out, cut my losses. To much downside risk as more funds potentially pull out and the recent news flow re ceo, divorce etc gives signs of potential bigger issues

[winner69]

Jeez that's a huge fall in share price today ...... collapse might be better description

I put some of my punting money on it today

[nztx]

Hamish has broken up with his missus, thing keep getting worse for mfg.



Looks like more than just a parting with his Missus going on ;)

12% of their current Annual Revenue just walked .. on 17th Dec

[kiora]

Ouch for him!
https://www.dailymail.co.uk/news/article-10285973/Inside-billionaires-shock-split-chairman-seen-James-Packers-yacht-left-wife-30-years.html