MFS - MFS Limited

[michael_selway]

The revised guidance was released to the ASX today, along with an operational update and information of an institutional placement. I strongly recommend potential investors (and of course, current shareholders) to read this. It's upbeat and very informative. Keeping in mind that management continue to underpromise and overachieve, it's kind of freaky what MFS is going to achieve and deliver in both the near term and over the next few years.

MFS was in trading halt today, pending the release of the above announcements. The bookbuild for the placement happened this afternoon and shares recommence trading tomorrow morning.

Not bad, revised to 35c EPS for 2007!

Earnings and Dividends Forecast (cents per share)
2006 2007 2008 2009
EPS 42.6 31.9 40.4 49.3
DPS 26.0 19.0 25.0 30.0

thx

MS

 

[Sean K]

I'm turning into an MFS fan as of today. Why? Because I actually had a look at them today, and hey, this looks like a great stock! The next B&B perhaps.

Might be early enought to get on the bandwagon, but it's had an awesome run. Has just broken out of some consolidation, so maybe a good time to get on.

Broker reports:
Company - Date - Rating - Target Price - Upside.
ABN Amro 20-Dec-06 1 Buy $5.89 23.5%
Macquarie 20-Dec-06 1 Outperform $5.75 20.5%
UBS 05-Dec-06 1 Buy 2 $5.24 9.9%

What a chart!

(not holding yet)

 

[Prospector]

It is one of my favourites too; have held since before it was BRK. Just seems to keep on keeping on, upward

 

[scsl]

I'm turning into an MFS fan as of today. Why? Because I actually had a look at them today, and hey, this looks like a great stock! The next B&B perhaps.

Might be early enought to get on the bandwagon, but it's had an awesome run. Has just broken out of some consolidation, so maybe a good time to get on.

Broker reports:
Company - Date - Rating - Target Price - Upside.
ABN Amro 20-Dec-06 1 Buy $5.89 23.5%
Macquarie 20-Dec-06 1 Outperform $5.75 20.5%
UBS 05-Dec-06 1 Buy 2 $5.24 9.9%

What a chart!

(not holding yet)

Welcome to this thread kennas! Isn't great to have a moderator that's so upbeat about this stock! I still continue to think that MFS is undervalued, hence my continuing to accumulate shares. The announcement on 19/12 (which I spoke about in post #60) didn't disappoint and further displayed the many things that will happen in the future as well as management's confidence, professionalism and upfront nature.

It's a great time to be jumping aboard - I'm driving! ...oh wait, MFS MD Philip Adams is. The S8 takeover has been completed successfully, EPS guidance has be revised up to 35 cps (still quite conservative IMHO) not to mention transactional and other one off income which both are becoming an important part of company earnings, the institutional placement being successful amidst significant demand from existing and new institutions – this provides MFS with “further financial flexibility”. Also, MFS’s journey into Asia via Dubai is a great start in terms of international expansion plans.

And I really appreciate you sharing the info from the broker reports. May I ask where you compiled it from?

It is one of my favourites too; have held since before it was BRK. Just seems to keep on keeping on, upward

It's definately my number 1! It wasn't long ago that MFS took over BRK (Breakfree), which left me very happy and with a pile of new stock, of which I had never heard of. But I was close to selling out (around April 2005) because of the steady decline in sp following uncertainty of transition and integration. Luckily I held out, otherwise there would have been a lot of .

 

[michael_selway]

It is one of my favourites too; have held since before it was BRK. Just seems to keep on keeping on, upward

MFS will be the next BNB imo

Earnings and Dividends Forecast (cents per share)
2006 2007 2008 2009
EPS 42.6 33.2 40.4 49.3
DPS 26.0 20.0 25.0 30.0

EPS(c) PE Growth
Year Ending 30-06-07 33.2 14.2 -22.0%
Year Ending 30-06-08 40.4 11.6 21.7%

thx

MS

 

[Sean K]

MFS will be the next BNB imo
MS

I've heard that somewhere else too Michael, in a broker review. Big claim, but on the cards. Do they have the same business model as BnB and Maquarie? I'd expect so, if brokers are stating that. I haven't bought any yet, are you holding?

 

[scsl]

Has had a great start to the year - it's now up 8% on it's opening 2007 price of $4.61. Having broken out on Dec 13, it then looked to be heading back towards the trading range that it had spent 7 months of 2006 in. Then while the ASX200 has reversed strongly in '07 so far, MFS went the other way, supported by increasing volume. Now here's one stock to follow in '07!

 

[scsl]

The volume of shares traded lately has been impressive. Trading in '07 so far (8 days inc. today) has seen volumes of at least 2 million shares each day. This is very significant because in the whole of calendar year '06, there were only 9 days where 2 million or more shares changed hands (the 5.7 million traded today was the second highest ever). And it's not as though the high volume is taking the sp down or keeping it steady - it's being taken to record highs. This shows that MFS is fast becoming a better known company (not just as a stock but as an investment and funds management company) and that institutional investors/traders are becoming more active.

 

[michael_selway]

The volume of shares traded lately has been impressive. Trading in '07 so far (8 days inc. today) has seen volumes of at least 2 million shares each day. This is very significant because in the whole of calendar year '06, there were only 9 days where 2 million or more shares changed hands (the 5.7 million traded today was the second highest ever). And it's not as though the high volume is taking the sp down or keeping it steady - it's being taken to record highs. This shows that MFS is fast becoming a better known company (not just as a stock but as an investment and funds management company) and that institutional investors/traders are becoming more active.

yeah i hold this one still

Earnings and Dividends Forecast (cents per share)
2006 2007 2008 2009
EPS 42.6 33.2 40.4 50.6
DPS 26.0 21.0 27.0 32.0

thx

MS

 

[scsl]

Volume is still great. However, in the near term, MFS is looking overbought, with the RSI at 78.

kennas, if you're still following this thread, would you be able to do some tech/a on MFS (in particular, MACD)? For example, is MACD a helpful indicator with this stock? I have little knowledge of MACD, but it looks like MFS could reverse a little once the blue line crosses down over the red line (looking at BigCharts). Also, what does divergence indicate?

Thanks,
scsl

 

[dubiousinfo]

Half year results are due out on 15 Feb. Could be a good chance of surprising on the upside & this may keep the SP up. May be a short term drop if only in line with forecasts. (Buy the rumour sell the fact)

I hold.

 

[scsl]

Well, MFS has surprised me and raced up 9% since my post on Saturday. In the three days of trading since, it's been bought up on strong volume. This capitalises MFS at a solid $2.3 billion - two years ago it was $196 million!

I had closed my CFD position last week thinking that the sp had had a very good rise from around $4 since the end of November, only to see it continue after 5 days of 'consolidating' at just below $5.20! (I still hold all my non-CFD shares)

I'm looking forward to the half yearly due in mid Feb, in particular news of the S8 integration. However, I think that the institutional investors are very confident that this important step of the acquisition is going to plan - as evidenced by the volume.

The last time MFS issued a large number of shares (relative to previous shares issued), was after the Breakfree acquisition. In the two months after, the shares slid to $1.20 on EPS dilution and integration concerns. That's why this time round, I'm extremely happy with how the sp has reacted to this large acquisition. Initially I was contemplating on delaying plans to accumulate MFS shares mainly due to the dilution of EPS (I'm confident that the S8 integration will go smoothly because of great management and the retaining of key S8 personnel). However, the upbeat earnings guidance and outlook and the holding up of the sp led me to instead accumulate since November.

For management to compensate for the dilution of EPS shows that growth at MFS is far from abating. Sounds cheesy, but MFS has an exciting year (and future) ahead! For those that don't hold, it doesn't hurt to do some research on this little beauuuty!

 

[michael_selway]

Half year results are due out on 15 Feb. Could be a good chance of surprising on the upside & this may keep the SP up. May be a short term drop if only in line with forecasts. (Buy the rumour sell the fact)

I hold.

its going up atm!

thx

MS

 

[scsl]

its going up atm!

Another great day on Thursday - up 16 cents on very heavy volume (I wouldn't be surprised if there were institutional investors accumulating). This capped off a fantastic week for MFS, in which it rose every day, for a 4-day gain of 61 cents or 12%.

I found this article on FN Arena. Just what we need more of - coverage of a very rewarding and well-run stock!

Further Upside For MFS
FN ARENA NEWS - 17/01/2007

Shares in diversified financial services company MFS (MFS) have risen solidly following the company's successful takeover of travel group S8, but the warrants team at ABN Amro sees further upside as likely.

While the broker's fundamental experts have retained their $6.00 price target in the medium-term, the Warrants team believes investors should take advantage of any price weakness to lift exposure to the group. The team expects the S8 takeover to prove earnings accretive in the short-term, while group earnings will be further boosted by the recent acquisitions of Saville, Sunleisure and Sunkids, among others.

The broker estimates earnings growth in FY07 will be in the range of 30-40%, supporting its expectation the group's price to earnings (P/E) ratio will fall from 13.7x in FY07 to around 10x in FY09. This leaves the stock attractively priced compared to the likes of Macquarie Bank (MBL) on 15.5x and Babcock & Brown (BNB) at 17x, without even factoring in the forecast dividend yield of 6.14%.

Additionally, the team notes the stock looks good in terms of technical indicators having recently broken through resistance at $4.60, with the trend suggesting further share price gains. When combined with the expectation of further deal flow over the course of 2007, there remains scope for further upside, the team argues.

Others covering the stock are equally positive, with the FNArena database showing three Buy ratings on the company and an average share price target of $5.63. Shares in MFS today are stronger, as at 12.35pm the stock was up 6c at $5.18.

Also, holders of this stock will be happy to hear that MFS is one of the 'Red Hot Stocks' of 2007, as given in the latest Smart Investor magazine:

MFS is a diversified financial group which will have more than $5 billion in assets under management by mid-2007. We believe it's set for further growth due to its merger with S8, its strong growth in assets under management and its leverage to Australia's mandated superannuation growth. It has close relationships with strategic players, including Babcock & Brown, and it also has attractive fundamentals. We expect further deal flow in 2007.

I just love it how MFS is gradually making investment banking a solid part of its business. Mmmmm... all those feeees!

 

[scsl]

MFS has found support at $5.50, on daily volume of above 1-2 million, which is quickly becoming the norm - before this year, volume of above 2 million was a rare occurance.

The half-year report will be announced before the market opens on 19 February (next Monday). Will MFS move up or down from here? IMO, MFS will continue to beat investors/anaylsts' estimates. Although the sp has run pretty hard from $4 in a little over two months, I belive the seven months of consolidation in 2006 has set MFS up for another good run, providing management delivers and gives upbeat commentary. Having said that, we could see $6 before the end of February if results are very good.

 

[michael_selway]

MFS has found support at $5.50, on daily volume of above 1-2 million, which is quickly becoming the norm - before this year, volume of above 2 million was a rare occurance.

The half-year report will be announced before the market opens on 19 February (next Monday). Will MFS move up or down from here? IMO, MFS will continue to beat investors/anaylsts' estimates. Although the sp has run pretty hard from $4 in a little over two months, I belive the seven months of consolidation in 2006 has set MFS up for another good run, providing management delivers and gives upbeat commentary. Having said that, we could see $6 before the end of February if results are very good.

Yeah its not bad

thx

MS

 

[scsl]

MFS's record surge

20Feb07

GOLD Coast funds management giant MFS has closed out a year in which it displayed an insatiable appetite for acquisitions with a record first-half profit of $33.34 million.

As if to say its Australian acquisitions were reaching saturation, the result was unveiled against the backdrop of managing director Phil Adams relocating to the United Arab Emirates where MFS has teamed up with the Sunland Group to explore new funds-management ventures.

The MFS profit result for the six months to December 31 is up 32 per cent from $25.23 million a year earlier and includes only about 20 days' contribution of about $1.8 million from travel group S8.

The profit surge was delivered on a mere 8 per cent lift in revenue to $162.8 million.

The group also announced that former Federal Liberal Party leader Andrew Peacock would replace Terry O'Dwyer as chairman next month.

It was a year of significant growth for the company which now boasts net assets of more than $1.1 billion.

Assets under management have surged from $2.2 billion a year ago to $4.25 billion, and the company still expects this to rise to $5 billion by the end of this financial year.

MFS has calculated its net tangible asset backing at $2.62 a share, up from a negative 0.01c in the 2005 December half.

The company's shares, which were suspended from trading yesterday pending a $466 million capital raising, last traded at $5.80.

MFS is seeking to raise $256 million via a rights issue, offering one MFS share for every 8.25 shares owned at an issue price of $5.10 a share.

It is also seeking to raise up to $210 million from a hybrid note-warrant issue of up to 2.1 million securities, with each note attached to 14 warrants.

MFS intends using the extra funds to arm itself for upcoming acquisitions in Australia and New Zealand, as well as the non-debt-funded component of its Sunleisure and Sunkids purchase from the Sunland Group.

The company is paying an interim franked dividend of 7.5c a share, up from 6c previously.

This is despite a near doubling of shares on issue from 230 million to 414 million. MFS said it was on track to exceed the 2006 full-year payout of 26c a share.

In December, the company revised its profit forecast upwards by 13 per cent to at least 35c a share.

Mr Adams yesterday said the interim profit result was particularly pleasing in light of the exclusion of figures from its Mt Hotham and Falls Creek ski operations, which have since been rolled into the MFS Tourism and Leisure subsidiary.

There is also a reduced input from its Hedge Funds Australia operation, in which MFS now has just a 39 per cent stake.

MFS is expecting continued growth in the year ahead, forecasting earnings a share to rise by 30 per cent in 2008.

MFS had a series of takeovers last year, including $700 million for the Surfers Paradise-based S8, Australia's largest travel group, the $700 million purchase of housing group Villa World, the $114 million buyout of Stockland's Saville hotel management business and the $91 million deal for Sunland's Sunkids and Sunleisure arms.

http://www.gcbulletin.com.au/article/2007/02/20/3372_business.html

 

[scsl]

I think what is remarkable is that despite there being a substantial increase in the number of shares (largely due to shares issued in the S8 takeover), management has still been able to increase the dividend by 25% from the previous corresponding period and EPS by 18%! WOW!!

With regards to guidance, 35cps for the full financial year has again been affirmed by the company. What’s more, ‘MFS seeks to exceed this guidance by a series of transactions and actions that are presently underway which will be enhanced by this raising. In the 2008 Financial Year, MFS will be seeking Earnings Per Share growth of at least 30%.’ Also, the half year profit ‘includes no material transactional or investment banking style revenue which is expected to be substantial in the 2nd Half.’

MFS will be raising up to $466 million to fund previously announced acquisitions (including Sunleisure and Outrigger), repay debt and/or fund future acquisitions, in which all three executive directors will be participating in full. MFS is not expanding too fast IMO, instead, this expanded capital base will allow it to fund investment opportunities as they come up. Keep in mind that MFS’s strategy is to look for opportunities that arise in the sub $200-300 million value category i.e. deals where MacBank and Babcock have no interest in.

The resignation of MD Phil Adams, who will move to reside full time in the United Arab Emirates, should in no way be seen as a negative – it can only be seen as being a great move. Mr. Adams, a founder together with CEO Michael King, still holds a significant stake in MFS, which means it’s in his best interests to see that expansion in the UAE is on the right track. He will have ‘complete executive responsibility for the management’ of MFS’s expansion in that region. In being one of the first movers in the UAE, I have no doubt that Adams will use this advantage to gain traction in funds management opportunities, amongst other things.

In case you’re wondering, the quotations are from the media announcement release on Feb 19. MFS resumes trading this Friday 23rd.

 

[michael_selway]

I think what is remarkable is that despite there being a substantial increase in the number of shares (largely due to shares issued in the S8 takeover), management has still been able to increase the dividend by 25% from the previous corresponding period and EPS by 18%! WOW!!

With regards to guidance, 35cps for the full financial year has again been affirmed by the company. What’s more, ‘MFS seeks to exceed this guidance by a series of transactions and actions that are presently underway which will be enhanced by this raising. In the 2008 Financial Year, MFS will be seeking Earnings Per Share growth of at least 30%.’ Also, the half year profit ‘includes no material transactional or investment banking style revenue which is expected to be substantial in the 2nd Half.’

MFS will be raising up to $466 million to fund previously announced acquisitions (including Sunleisure and Outrigger), repay debt and/or fund future acquisitions, in which all three executive directors will be participating in full. MFS is not expanding too fast IMO, instead, this expanded capital base will allow it to fund investment opportunities as they come up. Keep in mind that MFS’s strategy is to look for opportunities that arise in the sub $200-300 million value category i.e. deals where MacBank and Babcock have no interest in.

The resignation of MD Phil Adams, who will move to reside full time in the United Arab Emirates, should in no way be seen as a negative – it can only be seen as being a great move. Mr. Adams, a founder together with CEO Michael King, still holds a significant stake in MFS, which means it’s in his best interests to see that expansion in the UAE is on the right track. He will have ‘complete executive responsibility for the management’ of MFS’s expansion in that region. In being one of the first movers in the UAE, I have no doubt that Adams will use this advantage to gain traction in funds management opportunities, amongst other things.

In case you’re wondering, the quotations are from the media announcement release on Feb 19. MFS resumes trading this Friday 23rd.

Hi yeah not bad

Earnings and Dividends Forecast (cents per share)
2006 2007 2008 2009
EPS 42.6 33.8 42.3 49.8
DPS 26.0 25.0 29.0 33.5

EPS(c) PE Growth
Year Ending 30-06-07 33.8 17.2 -20.6%
Year Ending 30-06-08 42.3 13.7 25.2%

thx

MS

 

[Sean K]

MFS in a trading halt...

Still going great on the chart after breaking through $4.50, but might be due for another breather. Finding $5.80 a bit tough to really crack. Under $5.50 next support down at $4.50 really. Drawing way away from the 200 d ma....

Might all depend on what the news is.