What Happened to the MGR Share Price?
Mirvac Group [ASX:MGR] invests in and develops new residential and commercial real estate. They’re also involved with investment management. A core division of the company is MPT, an investment property trust. They primarily operate in Australia with some interests in America.
Mirvac closed down 1.35% on Friday.
Why Did This Happen to Mirvac Shares?
Two days ago, Mirvac announced a net profit of $447.3 million for 2014. That’s a massive 220% gain from the 2013 full year financial results.
Revenue grew 26% to $1.98 billion this year.
And the final dividend was 4 cents, bringing the full year dividend to 9 cents – up from 2013’s 8.7 cents dividend.
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How did the market take it? Flat…
And today the stock is selling off.
What Now For MGR?
A triple digit increase in net profit is nothing to sneeze at. However, it is also likely a one off as well.
The company reached an all-time high of $1.905 the day the financial data was released. I suspect this sell off is nothing more than investors taking a little off the top.
While the company is shifting its focus to achieve revenue from property management, it remains highly exposed real estate development for now.
For the 2015 financial year, Mirvac reckon 53.4% of its developments will be apartments. And 25.6% commercial. And even though only 63.6% of land acquisitions were in New South Wales this year…over 80% of Mirvac residential development will occur in NSW.
Because of the heavy exposure to NSW, any dip in property prices — especially NSW — is likely to rattle investors in Mirvac.
This stock may be for those looking to speculate on the commercial and residential sector.
Shae Smith+
Editor, Money Weekend
The post Why Did the Mirvac Group Share Price Fall Today? appeared first on Stock Market News, Finance and Investments | Money Morning Australia.
