The Magellan Financial Group Ltd (ASX: MFG) share price has struggled to outperform the S&P/ASX 200 Index (ASX: XJO), down 3.06% year to date and sliding 18.8% in the last 12-months.
Shares in the managed funds business have struggled to deliver positive returns in the near term despite major indices such as the Dow Jones Industrial Average, S&P 500, Nasdaq Composite and ASX 200 surging to all-time highs in recent weeks.
With Magellan due to report on Tuesday, 17 August, could its previous February half-year results give investors any cues?
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Magellan share price falls flat following half-year results
Unfortunately for Magellan, its half-year FY21 results would fail to inspire its underperforming share price.
For the six months ended 31 December, the company would report a 9% increase in average funds under management (FUM) to $100.9 billion.
In addition, the results would deliver a 3% decline in adjusted revenue and other income to $327.1 million and a 3% increase in net profit after tax to $202.3 million.
The slight decline in revenue was a result of a 70% decline in performance fees from $41.7 million to $12.4 million.
Management would advise that "performance fees can, and very often do, vary significantly from period to period".
And that change in profit before tax and performance fees had actually increased 8% to $256.2 million, which was broadly in line with the growth in average FUM.
The relatively flat result would see the Magellan share price slide 4.42% to $48.85 on the day of the announcement.
What about its upcoming results?
Goldman Sachs has flagged the Magellan share price as a potential "negative surprise candidate".
The broker flagged the company's recent June quarter FUM update, citing "outflows of A$351mn were worse than expected and look soft relative to current Visible Alpha consensus estimates for FY22 inflows of c. A$1.6bn".
Last year, Magellan announced that it had become a foundation investor in Barrenjoey Capital Partners, a newly established full-service financial services company.
Goldman said that "we feel consensus may be underestimating the early year drag associated with MFG's investment in Barrenjoey".
As a result, the broker retained a sell rating with a 12-month target price of $49.20.
With the Magellan share price closing at $51.40 last Friday, this represents a downside of 4.3%.
