By Jason Fittler
The last of the Australian Investment banks.
We have seen MFS and Babcock and Brown fail under the weight of the Global Financial Crisis while Macquarie was affected, they adapted quickly and survived.
We are now entering a recover phase in the market and Macquarie is entering this phase with a strong balance sheet ready for acquisitions. To start with they are buying 53 aircraft at a 14% discount to the book value. This acquisition is expected to add 2% to their earnings per share. But aircraft really, is a tough business.
For those who purchased Macquarie over the past couple of years you are most likely sitting on a nice profit.
Those who participated in the capital rising last year have doubled your money.
On this basis I am going against the analyst and looking to take profits on the stock.
For those with large holdings you may want to just take part profits and sell out half your holding. For small holding I would sell out completely.
I have no doubt that Macquarie will be a good long term stock. However, we are not out of the woods just yet.
I expect to see opportunity to pick up the stock cheaper in the future or invest the funds in a less risky stock with a higher yield and better growth prospects.
For more information on Macquarie Group please call us on 07 4771 4577.