Macquarie update already factored in

Macquarie released its September market outlook statement today with an almost ‘nothing to see here’ report.

The update is consistent with the statement released at the annual general meeting on July 25. The expectation then, as it is now, was for the first half of 2014 to be ‘broadly similar’ to second half of 2013; which has been a strong period. MQG also suggest, as with most yearly trading cycles, the second half of 2014 is expected to be stronger again as trading and lending optimism gains further momentum.

This is not new and the forward expectations given are conditional on ‘continued conservative cost initiatives and funding arrangements’. Since being decimated by the GFC, MQG’s structure has been under constant change; having had a horizontal management structure with a vertical staff set up left the company venerable, meaning cost cutting and staff changes were necessary.

The company has worked very hard over time to correct this structure and this year’s results are starting to show signs that this change is working. However, the more pressing issue for MQG share price isn’t company news, it’s fundamental valuations.

At near A$50 a share, MQG appears very expensive. Earnings per share are shrinking, coming in around 3.15 a share and its forward price to earnings ratio of 15.9 times earnings is a price most fundamental investors won’t pay. This suggests the technical resistance of $50 is now double-blessed by the fundamental resistance, with a P/E well above excepted levels.

MQG could be due for a pull back.  

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen. 79% van de retailbeleggers lijdt verlies op de handel in CFD’s met deze aanbieder.
Het is belangrijk dat u goed begrijpt hoe CFD's werken en dat u nagaat of u zich het hoge risico op verlies kunt permitteren.
CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen.