MBL macquarie bank limited

The best short on the market- almost a "CERT"

  1. 1,816 Posts.
    MArket cap = $4B

    Earnings in the current year will exceed $250M

    Next years earnings wil be??

    My analysis:

    - Share option renumeration exceeded $200M last year. No one at MBL will want options in future- they'll all want higher base salaries. End result? A unmotivated work force and higher salary expenses. Minimum effect on NPAT -$30M

    - Proceeds from MIG, MAP, etc will exceed $100M this year. Next year they won't exist! No one will touch any new macquarie trusts going forward ... which means ZERO fees. Minimum effect on NPAT -$60M

    - MBL's other existing business units (corporate advisory, M&A, etc) are highly reliant on the level of corporate activity, and the health of the general market. These areas are also very competitive (brand credibility is very important). Expect much lower earnings from these divisions in future years. Minimum effect going forward on NPAT -$50M.

    All in all, i calculate MBL's NPAT to be in excess of $120M lower than the current year.

    NPAT next year will be around $150M (or lower), imho.

    Place these earnings on a multiple of 13x earnings (the benchmark multiple for investment banks o/s), and we've got a valuation for MBL of approx $2B.

    This equates to a share price of $10 !!!

    Short this cr*p out of MBL, and laugh all the way to the bank!!!
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