Sharechat Logo

Stock Recommendation: MFS

By Imran Valibhoy, Equities Analyst at wise-owl.com, an Australian investment research house.

Tuesday 30th January 2007

Text too small?

It is not often we come across an emerging investment bank which has the potential to become a leading player in the finance industry. However, MFS Limited (MFS) is showing all the characteristics of becoming one of these.

MFS is a diversified investment company in the funds management and financial services sector. The company owns the MFS Funds Management Group, the HFA Funds Management Group and a range of domestic tourism related assets including the Mount Hotham ski resort, the Falls Creek ski resort and Saville Hotel Group.

It has been a busy year for MFS with numerous takeovers which have seen the company divesting their asset base further. The amount of fee paying assets under management is currently standing at $3.87 billion.

Assets under management is expected to grow to $5 billion this financial year with numerous takeovers planned. The largest target is S8 Limited (SEL) for around $700 million.

With the acquisition of Saville Hotel Group, MFS is now the second largest accommodation management group in Australia and will further benefit from the integration of S8 Limited.

MFS have also purchased the Northplan financial advisory firm which has NZ$670m funds under management and advice. The company also recently struck up an agreement with Sunland Group with regards to their Sunkids and Sunleisure operations. On the property front, MFS have taken a 30% stake in Gersh Investment Partners Ltd.

The more assets MFS have under management, the more fees they are able to extract which increases revenue. We expect assets under management and the number of investors to increase which should see revenue increase even further.

MFS reported revenue of $327.7m to the 30th June 3006 which was up 131% from 2005’s revenue of $141.2m. The company is due to release its eagerly anticipated half year results on Thursday, February 15th which should set the tone for the rest of the year.

Going forward, MFS are looking to diversify even further with growth streams such as environmental infrastructure and overseas investments. They are also looking to increase their presence in the Sydney and Melbourne markets as well as New Zealand.

The current acquisitions should guarantee further impressive growth in revenues which should lead the market to a re-rating of the stock which is currently trading at cheap multiples relative to its peers.

Wise-owl.com currently has a buy recommendation on MFS Limited




Start making wise investment decisions today!

Wise-owl.com is offering Sharechat.co.nz members an exclusive Equities Report trial. Click here to register your details and find out why wise-owl.com’s research is sought after by leading financial organisations and the media.



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

KMD - 1H FY2024 Interim Results
SCT - Resignation of Chief Executive Officer
March 19th Morning Report
SKC - APPOINTMENT OF CHIEF INFORMATION OFFICER
NWF - Chief Executive Officer Warren Koia Resignation
March 18th Morning Report
Pacific Edge Directors Give Notice of Retirement
Meridian Energy monthly operating report for February 2024
Another unworkable farming rule bites the dust
March 14th Morning Report