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MQG - Macquarie Group

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Another positive article on MQG profit forecast. My only question is when are they suppose to announce it ??? Can anyone advise ?

Moss departure makes markets mean
07/02/08

The chief executive of Macquarie Group, Allan Moss, has announced his retirement and from May will be replaced by Nicholas Moore, currently its investment banking chief. Mr Moss reassured investors that the he was leaving the company in great shape and was handing it over to an outstanding successor but markets were not convinced. Shares in Macquarie were cut by 9 per cent yesterday, falling $6.06 to close at $61.10, but Macquarie blamed falls on Wall Street for this which saw the local market down 3 per cent. Macquarie is expected to announce another record profit of $1.8 billion in May, 23 per cent more than last year.
 
Garpal Gumnut said:
MQG is in a down trend with lowers lows and lower highs since the lows of August last year.

It may appear cheap now, but if it goes below $60 on higher volume there is nothing on the charts to give it support until $50.

It has also broken below the 30 week moving average and "loseable money" would be required to buy in , until it has trended sideways in a range for a few months. This may occur over the next few months, it may continue downwards.

It may even go below $50. After that $30 is the next support. Have a look at the enclosed chart.

"Brave" would be an accurate description for a buyer of MQG in this market.

gg
Click to expand...

Geez what Garbage! Are you kidding me? I think you need to go back to technical analysis school. You are dreaming.

Anyone that believes what he's saying needs their heads read. $30!!!! Yeah OK, BHP should be at $15 dollars soon too NOT.

I can't believe how scared this recent correction/crash has people. We aren't talking about a speculative stock here. We are talking about one that will actually MAKE nearly 2 Billion Dollars PROFIT. Do you really think banks will suddenly STOP lending money?? They will clamp down of course and this is a GOOD thing but banks (MQG included) make their money from LENDING.

Mr Garpal NumbNuts seems to dislike any stock that has anything to do with property or money. Anyone who can say AFG & BNB & MQG will all suddenly fail is simply mad. (AFG maybe but I've made my 100% buying them at 1.85). And putting AFG in the same boat as MQG is like putting AQD or SDL in the same boat as BHP. Sure they both dig holes in the ground but the comparisons end there.

MQG trending sideways for a few months? Um yeah sure that will happen. NEVER!

People, don't assume that anyone who posts a Chart knows what they are talking about. Ignore fundamentals at your peril!


:2twocents
 
If I could be confident of the "nearly $2b profit" I'd be out there buying now, but I'm not.
Have the greatest respect for MQG but they're not like a trading bank. They don't make a big proportion of their profit by lending money and sure, they have a proportion of repeating management fees but they have to go out and do deals each day to top up to nearly $2b.
Until I see a bit more stability in that market I'm keeping my pwder dry. :cool:
 
oldblue said:
If I could be confident of the "nearly $2b profit" I'd be out there buying now, but I'm not.
Have the greatest respect for MQG but they're not like a trading bank. They don't make a big proportion of their profit by lending money and sure, they have a proportion of repeating management fees but they have to go out and do deals each day to top up to nearly $2b.
Until I see a bit more stability in that market I'm keeping my pwder dry. :cool:
Click to expand...

That comes back to my question. Can anyone tell us when MQG is suppose to release their profit statement $2 b or whatever it will be ??
 
May 20th 2008

Anyway, I do think it is a good buy for the long term at this price, as money becomes a smaller and smaller unit, I don't believe organic growth isnt always the only way to make quick gains, and M&A activity will still be on the agenda. There is no better credit rating than in the utilities sector, especially when it's the ONLY service you'll still pay for in a recession. In the short term, deals may suffer from slower M&A but at curent fed interest rates and record dilution of paper money, doom and gloom has been postponed to later, whewn doom and gloom turns into impending death. I'll buy gold then and move to the farm
 
I wouldn't be too critical of GG.

He got the CVN trend right and I actually respect his charts.

Tronic, he didn't say it would go to 30 in a flash of the pan. He said that IF it breaches 60 its next support is 50.

He never said its over.
 
tronic72 said:
Geez what Garbage! Are you kidding me? I think you need to go back to technical analysis school. You are dreaming.

Anyone that believes what he's saying needs their heads read. $30!!!! Yeah OK, BHP should be at $15 dollars soon too NOT.

I can't believe how scared this recent correction/crash has people. We aren't talking about a speculative stock here. We are talking about one that will actually MAKE nearly 2 Billion Dollars PROFIT. Do you really think banks will suddenly STOP lending money?? They will clamp down of course and this is a GOOD thing but banks (MQG included) make their money from LENDING.

Mr Garpal NumbNuts seems to dislike any stock that has anything to do with property or money. Anyone who can say AFG & BNB & MQG will all suddenly fail is simply mad. (AFG maybe but I've made my 100% buying them at 1.85). And putting AFG in the same boat as MQG is like putting AQD or SDL in the same boat as BHP. Sure they both dig holes in the ground but the comparisons end there.

MQG trending sideways for a few months? Um yeah sure that will happen. NEVER!

People, don't assume that anyone who posts a Chart knows what they are talking about. Ignore fundamentals at your peril!


:2twocents
Click to expand...

Thanks for your reply.

MCQ is a stock that has grown like topsy over the last few years. I note that you bought AFG at $6.70 in January and it now sits at $3. I believe it has been lower, I don't follow stocks in a down trend. Waiting for a bottom and trend sideways is a much safer way of getting onto a recovering dog.

MQG is at $60. If it follows the path of your previous tip AFG it could conceivably also lose over 50% in value. This would put it at $30, less than half of its present close today.My charts on AFG and MQG are reasonable takes on these stocks

I do like property, money and stocks, love em. I am wary however of overgearing. Many in Australia share by views about the stocks you mention. they are over geared, margined by those within and without their boards, and stalked by short sellers on weakness.

gg
 
YELNATS said:
As per the article
Quote
JP Morgan has a price target on the stock of $104.03.
Unquote

Such precision and by when??? How come these analysts/pundits with their price predictions never seem to state "by when"?
:confused:
Click to expand...

ha ha ha, if they knew by when, they would be making 100x trading options!

Thats why most of their price recommendations are BS. It will reach above $100..............in 10 years!

If they thought it would make $104.03 in the next year, I would definitely sell them options! They could buy the long call today and send that cash to my account immediately ;)
 
When all the brokers is recommending a stock it's time to sell it, that the time you get your best price :D
when they all recommending to sell I be doing real research on that stocks .... and looking to buy if it's a good stock
 
Firstly, a note to people making any personal attacks clearly based on personal ownership of a stock, please do not. Thanks. :)

Also, please do not increase the font size to make a point, this is against the posting policies of ASF. Cheers again. :)

As far as broker targets go, many do give time frames, and it's usually in the detailed report, not the bone they throw out to newspapers.

As far as the chart goes, it's managed to find support at 60 as you would expect on this 3 year chart, but where it goes from here is unclear. The short to mid term trend still looks to be down, no matter how much money they make this year.
 

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Yeh, personal attacks are a bit much. I always appreciate the technical guys analysis a lot, that is why I asked the questions I did. Ah well, Ive just started reading up on a bit of it myself (once I fully finish reading up on options), hope it doesnt influence my fundamental analysis subconciously once I do learn technical analysis for myself :confused:

That thread in the trading strategies section on this topic by WayneL is interesting, but doesnt appear to come to any kind of conclusion.
 
If MGQ drops to $30 what price would CBA be? or BNB($4?) 1.8 billion not bad for these times and Mr Moss with a strong risk managment profile has done the sums on his own future... 60... better to get out and spend some of that cash while I can.
 
MGQ and CBA are totally different models.. it belongs in the finance sector but it make its money differently... MGQ is much higher risk than CBA.

MGQ makes money on M&A and Fund management. In bear market who want to do M&A?

CBA is every day mum and dad banking where they can jack up a $1 fees here and there and they increase millions in their bottom line.

I'd rather be holding CBA than MGQ for long term.
 
Thanks for that. I know they are and have differing risk profiles My point is for MQG to drop to $50.00 the overall market will also be in freefall. 6 months into a sub prime bear market MQG has never dived alone and I don't see any reason for that to change given the latest operational brief. Oh and banks don't get to $60 per share just on suppling mums and dads with a safe haven for their spare cash and a mortgage for the kids.
 
tronic72 said:
Geez what Garbage! Are you kidding me? I think you need to go back to technical analysis school. You are dreaming.

Anyone that believes what he's saying needs their heads read. $30!!!! Yeah OK, BHP should be at $15 dollars soon too NOT.

I can't believe how scared this recent correction/crash has people. We aren't talking about a speculative stock here. We are talking about one that will actually MAKE nearly 2 Billion Dollars PROFIT. Do you really think banks will suddenly STOP lending money?? They will clamp down of course and this is a GOOD thing but banks (MQG included) make their money from LENDING.

Mr Garpal NumbNuts seems to dislike any stock that has anything to do with property or money. Anyone who can say AFG & BNB & MQG will all suddenly fail is simply mad. (AFG maybe but I've made my 100% buying them at 1.85). And putting AFG in the same boat as MQG is like putting AQD or SDL in the same boat as BHP. Sure they both dig holes in the ground but the comparisons end there.

MQG trending sideways for a few months? Um yeah sure that will happen. NEVER!

People, don't assume that anyone who posts a Chart knows what they are talking about. Ignore fundamentals at your peril!


:2twocents
Click to expand...
Tronic,
You are omitting to take into consideration general market nervousness about MQG's business model which even analysts suggest is extremely complicated.
One talking head I heard yesterday suggested if MQG's figures were not sufficiently profitable, they would simply 'make some adjustments' to allow the bottom line to look better.

I've made some good profits from MQG but feel more comfortable staying out right now.
 
Re:JPMs price target, it's usually a 12 month target. And FYI Brian Johnson is probably the most respected equity analyst in Australia.

You are omitting to take into consideration general market nervousness about MQG's business model which even analysts suggest is extremely complicated.
Click to expand...

Macquarie's business model is actually quite simple. Not as simple as manufacture it and sell it, but pretty simple. I challenge you to name some analysts (with source links) who think Macquarie's model is extremely complicated - and if you do find some, I sure won't listen to them again. It's not Centro we're talking about here.
 
Here is a link to an article written in Fortune mag back in Oct 2007. Have a good read.

http://money.cnn.com/2007/09/17/news/international/macquarie_infrastructure_funds.fortune/index.htm

Although the person calling to attention of MQG's business model is a hedge fund manager, nevertheless, many of his "accusations" and doubts do make sense; and if you are an investor in MQG, you should be concerned, if not, at a minimum, should seek to verify if MQG is facing real issues and possibly problems as pointed out in his view.

Now that most people know the credit crunch is on. They also know it is getting harder to borrow money and the cost of money is going up. Many of the excesses built up in the equity and property markets in various part of the globe are getting their due treatment - a deflation of prices.

Here's a typical scenario. As recent as of 1st Feb 08, MQG reported this in the AFR: Macquarie's Singapore REIT reports 39pc jump in valuations, now I am not sure whether this will translate to higher performance fee or not, but based on some of the more recent property news in Singapore, the government over there is taking action to cool down the property market. Here's a typical news:

http://singaporepropertyfrontiers.com/2008/02/09/rising-cost-of-going-en-bloc-adds-to-cooler-market/

Question should be asked with regard to the 39pc jump in Mcq Singapore Reit - is this jump the last or the beginning? Is it sustainable?

As an investor, I think he or she would and should dig a little deeper into the matter. I would, if I am an investor.

Some of the other concerns raised on MQG in the article which I found should raise an alarm among the investors, now that credit crunch is upon us, and debt and over-everaging is a dirty name, are:

That the funds are fee factories for Macquarie wouldn't be so much an issue - sure, it's more rapacious than your average private equity firm, but only a little - if it weren't for another part of the picture. That's debt.
Macquarie uses debt of as much as 85% to purchase an asset and pay for the necessary capital expenditures. This debt is hard to see, because it doesn't reside on Macquarie's books. You won't even see it by looking at the financial statements for the funds.

Instead, it is held at the asset level. For instance, if you glanced at the financial statements for MIG, you would see debt of A$2.6 billion. But the assets themselves carry another A$8.7 billion of net debt. In part because there is less disclosure on some of Macquarie's other funds, it is impossible to independently calculate how much debt there is across the entire empire.

Over time the debt held by assets has often increased, not decreased, because Macquarie adds to it partly to pay shareholders their promised dividends. That's because the assets themselves don't deliver enough cash. Indeed, if you look at individual assets, from the Skyway to the M6, they may lose money after their interest expense.

So Macquarie borrows more money and uses it to pay the dividend now, much the way a homeowner might take out a home-equity line to pay a credit card bill. "Borrowing future growth to pay investors today bears the hallmarks of a Ponzi scheme,"


And then this:

Last January, Merrill Lynch analyst Matthew Davison pointed out that none of five large publicly traded Macquarie funds can fully fund their distributions. That's part of why Davison labeled Macquarie "the house that debt built." He also cited the "aggressive structuring" of the debt at the asset level. (See correction.)

For instance, on both the Indiana Toll Road and the Chicago Skyway, interest payments are very low in the early years, which increases cash flow at first but leads to much higher interest in out years - akin to a mortgage with a low teaser rate. In 2007 the Skyway will pay interest of just $129,000 on $961 million of debt. But the interest payment for 2018 is to be $480 million - that's not a typo.

Take a closer read and find out for yourself how much truth is being raised, or it's just some kind of bad-mouth job by a hedge fund manager who is shorting the stock. I leave that to individual to draw their own conclusion.

Cheers.
 
ROE said:
MGQ makes money on M&A and Fund management. In bear market who want to do M&A?
Click to expand...
In one word - predators ;)

I do understand your point. There is bound to be a reduction in "Murder & Aquistion" activity in poor sentiment market conditions.
 

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