The Macquarie Group share price up 12% in 2019: Is it too late to buy?

The Macquarie Group Ltd (ASX: MQG) share price has been riding the positive momentum of the general market and is up almost 12% so far in the new year.

The investment bank and asset manager has consistently outperformed the market and traditional banks. Macquarie currently trades at $121.45 which is only 5% off its all-time highs of $129.87.

Is it too late to invest in Macquarie shares?

Macquarie is arguably Australia’s largest global investment bank. The company offers geographic and operational diversification. In its FY2019 half-year report, 67% of total income was generated offshore across a diverse range of divisions including asset management, asset finance, banking and financial services, commodities and global markets.

The market was quite pleased with Macquarie’s half-year result as the stock rallied 4% back in early November 2018. The report highlighted operating income growing by 8% compared to the prior corresponding period, net profit increased by 5% and the dividend per share had increased by 5%.

I believe that there are currently more tailwinds in play for Macquarie.

In the previously mentioned half-year report, Macquarie cited “a 10% movement in AUD is estimated to have approximately a 7% impact on NPAT”. The Australian dollar/US dollar is currently near yearly lows, which should have a positive impact on Macquarie’s bottom line.

Macquarie’s Asset Management, Commodities/Global Markets, and Macquarie Capital business divisions are also heavily tied in with the performance of the general market. There have been some positive implications for the equity markets such as the US Federal Reserve announcing that they will be ‘patient’ on further hikes. Buoyant equity markets are expected to have a positive impact on Macquarie’s business.

Foolish takeaway

Macquarie’s share price has currently run up too much for my liking. However, the company seems fairly good value at only 14x FY19’s estimated earnings.

Macquarie’s full-year results are expected to be announced on 12 February 2019. I would describe Macquarie as the type of company to under-promise and over-deliver. I would not be surprised to see Macquarie outperform when it reports.

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Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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