McMillan Shakespeare Group (ASX:MMS) has been a fascinating study over the past year or so. A stock widely moved around as a result of the decisions (and potential decisions) of the government of the day.
I wrote about the company and my view of the situation here after the dramatic price fall last July.
From my perspective, on the 7th of May, the price action hinted that the market knew the decision being handed down the following week at the federal budget would be favourable to McMillan Shakespeare and no changes would take place with regards to Fringe Benefits Tax (FBT).
On the 8th May, again from my view, the price action did confirm a favourable decision was in store for McMillan Shakespeare by breaking up from the downtrend at $10.00 (our recent buy).
With the FBT ‘no change’ decision confirmed in Tuesday’s budget, the company’s UK division growing and my estimate of intrinsic value circa $15.00 per share by June 2015 and rising in future years, I think the share price is likely to trend up for the foreseeable future.
McMillan Shakespeare is now confirmed as a long term hold in The Edge Fund.
This article is published by Dean Mico.
Disclosure: The Edge Fund owns shares in McMillan Shakespeare Group.
The information provided in this article is intended for general use only. The article is intended to provide educational information only. Please be aware that investing involves the risk of capital loss. The information presented does not take into account the investment objectives, financial situation and advisory needs of any particular person, nor does the information provided constitute investment advice. Under no circumstances should investments be based solely on the information herein.