Stock of the day: MA Financial

(AI video summary)

This video was created on 15 April for IG audiences by ausbiz.

ASX code: MAF

MA Financial's operational update and market positioning

MA Financial Group released its quarterly operational update, directly addressing current market volatility. The company highlighted that its diversified nature and positioning in alternative, largely defensive asset classes serves as a strength in the current environment.

While the firm maintained a positive outlook, it cautioned that prolonged market volatility could potentially impact the transactional side of its business, particularly corporate advisory. Nevertheless, MA Financial noted that corporate advisory activity has remained robust at the start of 2025.

The company reported that assets under management remained flat year-on-year following the divestment of two real estate assets. Additionally, its real estate credit strategies have maintained historically high cash levels, with the portfolio described as "robust with minimal distress" in terms of problem loans.

Evaluating MA Financial's investment potential

Despite current market uncertainties, MA Financial's business model appears resilient. Trading at approximately 12.5 times earnings, the company is forecast to more than double its earnings before interest and tax (EBIT) in 2025, with projections of an additional 30% growth in 2026.

As primarily a funds management and annuity business, MA Financial's revenue structure provides some insulation from market fluctuations. The corporate advisory segment, which represents about 10-11% of revenue, remains the area most vulnerable to market volatility, though it currently continues to perform well.

When compared to Macquarie Group, which trades at approximately 15-16 times earnings, MA Financial may present a compelling opportunity following its recent pullback.

Market sentiment and future outlook

Analysts maintain divided opinions on MA Financial's prospects. Some express caution regarding the potential challenges in attracting new inflows and replacing sold assets, particularly as tailwinds in private credit and funds under management may be slowing.

Others view the recent share price decline as potentially unjustified, especially when compared to companies with direct exposure to geopolitical tensions. They suggest the current valuation could represent an attractive entry point for investors focused on medium-term rather than short-term results.

With its defensive positioning and growth projections, MA Financial merits consideration for those seeking opportunities amid current market turbulence, though investors should remain mindful of broader market conditions that could impact performance.