Iconic Australian fund manager Magellan Financial Group Ltd (ASX: MFG) has a lengthy history of success.
Looking back, 2019 was a particularly strong year for Magellan, with the Magellan share price rocketing more than 158% higher during the calendar year.
Shares in the company, co-founded by Hamish Douglass, reached an all-time closing high on 14 February 2020 of $73.67 per share.
Then came the COVID-19 market panic. By 23 March 2020, the share price had crashed 58%. While shares have recovered strongly from that low, up 68%, the Magellan share price remains down 31% from the 14 February peak. And, so far, it’s been sliding in the new year, down 4% year-to-date in 2021.
Which has many investors wondering, is now the time to buy Magellan shares?
What are analysts saying about the Magellan share price?
After a stellar 2019, the latter quarters of 2020 were certainly not the best for Magellan shareholders.
As the Australian Financial Review (AFR) reports:
Weighing on Magellan’s share price are the below-par fund returns in recent months of its Magellan Global equities fund. At November 30, that fund’s six-month return trailed the index by 8.2 per cent and most likely fell further behind in December as its largest holding Alibaba has sold off.
The AFR also notes that there’s no consensus at this time among analysts on whether or not the stock is a buy, “[b]roadly speaking, analysts are split on Magellan, with three buys, four holds and five sells on the stock.”
With that said, it’s worth having a look at the company’s funds under management and performance fee update, released to the ASX this morning.
Magellan reported that in December it had $579 million of net inflows, comprised of $252 million in net institutional inflows and $327 of net retail inflows. The company stated it will pay distributions of roughly $132 million in January.
The company also revealed it is entitled to performance fees of around $12 million for the 6-month period ending 31 December.
Magellan Financial Group company snapshot
Magellan is a funds management business that invests in some of the world’s top companies. Magellan’s investment team manages global equity and infrastructure strategies to high net worth and retail investors in Australia, New Zealand and institutional investors globally.
Magellan shares began trading on the ASX in 2004 and it is now part of the S&P/ASX 200 Index (ASX: XJO). On current prices, the company pays a 4.2% dividend yield, 75% franked.
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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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