Paragon Funds Management: Macquarie capitalising on buoyant conditions
Macquarie is currently yielding a 4.6% forward dividend (March year-end FY16F), and based on our estimates is growing earnings at 30% CAGR for the three years to FY16F. Macquarie is taking advantage of buoyant conditions across key segments including 1) Asset Management, 2) Corporate & Asset Finance, 3) Commodities & Financial Markets and 4) Banking & Financial Services; all of which are contributing to its growth. Macquarie is well capitalised and in our view still in an earnings upgrade cycle. We expect solid yield + growth to continue as Macquarie’s key segments drivers - low global rates, loose monetary policy, strong net inflows, buoyant and liquid market conditions and AUD risk to the downside - remain in place. Macquarie Asset Management – a leader in global Infrastructure – has grown significantly and offers annuity style earnings from its base management fees, and scope for material ongoing contributions from its performance fees. We went long Macquarie at $56.58/sh on the 18th of Dec 2014 for the above very reasons and despite its near 50% increase, continue to like the stock’s risk:reward. Read the full report (VIEW LINK)
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John co-founded Paragon in 2012 and became principal and majority shareholder from 2017. John is responsible for executing the investment strategy and managing the Paragon Australian Long Short Fund. John has had 16 years in financial markets,...