Why has the Magellan share price leapt 21% in a week?

A man and woman jump in the air and high five with both hands on a road after running.A man and woman jump in the air and high five with both hands on a road after running.

The Magellan Financial Group Ltd (ASX: MFG) share price is having a volatile start to the trading week.

Magellan shares are down by 0.57% at the time of writing to $14.04 a share, and at one point sank as low as $13.96 soon after market open. Despite these dips, the Magellan share price has spent most of Monday morning in the green.

The S&P/ASX 200 Index (ASX: XJO) is booking a tentative loss of 0.13% so far today.

But despite this shaky start, one can’t deny that the Magellan share price has had a cracking week. This time last week, Magellan was starting the trading day at $11.55 a share. That means that Magellan has risen an impressive 21.56% in just a week’s worth of trading.

So how has this company pulled off such an impressive increase in value over a short space of time?

Why has the Magellan share price hit the roof?

Well, it’s not entirely clear. Magellan hasn’t put out any announcements over the past seven days that one might consider ‘game changing’.

Much of this gain did come last Wednesday though. At the time, we covered Magellan’s 9% rise in a single day. As my Fool colleague Bronwyn covered at the time, this could have been sparked by Magellan’s new InReview 2022 commentary.

This discussed how Magellan is holding “a cash level moderately higher than usual” for its funds, as well as probing how the “dominant driver of equity markets is likely shifting from interest rates to earnings”.

But it’s also worth pointing out that before last week, the Magellan share price had taken a massive tumble. The company’s shares dropped from the $13.83 Magellan was commanding on 24 June to the  $11.55 Magellan finished last week at – a drop of 16.5%.

So it’s always possible that value investors decided that that share price range was just too low, and have subsequently bid the fund manager higher this week.

It’s also worth noting that Magellan has a somewhat cyclical share price, thanks to the correlation the performance of its funds has with the broader share market. Last week saw the ASX 200 give a strong performance. So the ground was arguably quite fertile for Magellan shares to start with.

Whatever the cause, it has certainly been a pleasing time for the Magellan share price of late.

At the current Magellan Financial Group share price, this ASX 200 fund manager has a market capitalisation of around $2.6 billion, with a trailing dividend yield of 15.97%.

The post Why has the Magellan share price leapt 21% in a week? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Magellan Financial Group Ltd right now?

Before you consider Magellan Financial Group Ltd, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Magellan Financial Group Ltd wasn’t one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

See The 5 Stocks
*Returns as of July 7 2022

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);

More reading

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 Scott Phillips.

from The Motley Fool Australia https://ift.tt/Ig9305u

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s