I've done some research on this stock, and thought i'd share in case anyone is monitoring this stock..
Market
There has been a recent trend towards listed stocks following FOFA and general disillusionment with the value proposition of Investment Platforms like BT, MLC etc. A lot of IFAs and dealer groups are using managed accounts MDAs or SMAs to demonstrate greater value to their clients. Essentially this enables the adviser to be seen as actively managing the clients portfolio rather than dumping them into managed funds. I believe there is continued growth in this product.. The question is whether MGP is positioned to win..
Company
The Advised asset market is traditionally dominated by the big banks and AMP. So MGP is a minnow help independent advisers setup a investment proposition that side skirts the big platforms. They are currently filling a niche that is missed by the big platforms - but there is evidence that BT and others are moving to close this gap. For me, MGP's main advantage is time. If they can wrap up a good portion of the IFA FUA in the next 1-2 years before alternative managed account products arise then they will have a viable business. So if your watching anything closely then watch the FUA uptake and whether you believe they can sustain it. The business model is relatively sound as there are minimal overheads in the B2B model and highly scalable if they can add FUA.
I am watching the price at the moment, but would suggest that the long-term value of this stock will only come from acquisition as i don't see any major advantages over the bigger players in the industry. Potentially some short/medium term capital gain potential if they can support an optimistic FUA growth story..
Any thoughts?
MGP Price at posting:
34.5¢ Sentiment: Hold Disclosure: Not Held
