Macquarie Group and APA

I purchased Macquarie at $71 in my SMSF. Where do you see it in 6 months?

I have also held APA for 6 months, for which I paid $5.96. Do you think its worth holding on to?

A: Hi Gerald,


Thanks for the question.


Personally, I don’t think Macquarie is going to get back to $71 in the next 6 months – a lot will depend on the market and general investment market activity – it will do relatively better in a strong market. Switzer expert Charlie Aitken made a call the other day on Macquarie – he concluded his review with the following:


“Trading on 15.6x FY14 and offering +35% EPS growth (cum upgrades) and a 4.6% yield, MQG remains a core member of my high conviction buy list with a $60.00 12-month target (15x FY15). There was a lot to like about MQG’s numbers on Friday: don’t let any of their biased competitors convince you otherwise.”


On APA, I think it is pretty fully valued around $6.15. According to FNArena, the broker consensus forecast price is $6.00. It is currently trading on a forecast 2014 yield of 5.9%, and 2015 yield 6.0%. This is not tax advantaged – so hence my comment that the price is pretty full.


Hope these comments help.



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