The Magellan Financial Group Ltd (ASX: MFG) closed 1.5% lower at $39.51 on Friday as the disappointing run continues for shareholders.
Shares in the Aussie financial group are now down 13% in the past month and hit a new 52-week low on Wednesday.
Why the Magellan share price hit a 52-week low this week
One big factor was a tough 2021 financial year for the investments group. While some ASX companies prospered and posted big growth numbers in the August reporting season, Magellan didn't manage to join them.
Some of the big takeaways from the group's August 17 results release:
- Retail funds under management (FUM) up 15.4% to $30.9 billion
- Institutional FUM up 17.9% to $83 billion
- Net profit after tax down 33% on the prior corresponding period to $265.2 million
- Adjusted net profit after tax down 6% on FY20 numbers to $412.7 million
- Partially franked (75%) dividend down 2% year on year to 211.2 cents per share.
The Magellan share price has slipped lower following the results update and hit a new 52-week low on Wednesday. Given the recent declines, it does beg the question of whether or not Magellan is in the buy zone.
Is the Aussie financial group in the buy zone?
Investors are always hunting for a bargain. Unfortunately for Magellan, a notable broker doesn't think that it's a great buy just yet.
UBS recently slashed its price target on Magellan shares to $35 and moved the company from 'neutral' to 'sell'. Notably, Magellan does own a 40 per cent stake in rival investment bank Barrenjoey Capital Partners which has been on something of a talent raid across the local banking landscape.
UBS downgraded the Aussie financial share as it weighed up headwinds facing Magellan going forward. It's not necessarily all bad news for investors, however, with Morgans setting a $58.05 per share price target back in mid August.
Stronger FUM growth and investment performance could be worth watching for their near-term impacts on the Magellan share price.
