Why the Bingo Industries and Magellan Financial Group share prices rose 20% in June


Bingo Industries Ltd (ASX: BIN) and Magellan Financial Group Ltd (ASX: MFG) are two ASX 200 growth stocks operating in what could be considered almost polar-opposite industries.  

Regardless, both stocks have been able to leverage the positive start to the new financial year and soaring ASX and are up more than 20% since the beginning of June.

Let’s take a closer look at why…

Magellan Financial Group

On one hand, Magellan is a funds management business that offers international investment funds to high net worth and retail investors in Australia and institutional investors globally. The company is widely regarded as one of the best fund managers in Australia, and this can be reflected in its stellar share price performance. Magellan shares are up well over 100% since the start of the year and almost 350% in the past five years!

Magellan shares went gangbusters after the announcement of its half-year results back in February. The company recorded a 225% growth in net profit after tax to $173.5 million and a 35% rise in average funds under management to $72.1 billion.

I believe Magellan is strongly positioned to leverage the volatile, yet bullish global markets. The Australian market has recently hit fresh 11-year highs and the US market is testing new all-time highs – these strong positive market movements should directly affect Magellan’s investment portfolios and bottom line.

Bingo Industries

Bingo is a waste management and recycling company operating predominately in New South Wales. It is a vertically integrated waste management operator with operations in waste collection, processing, separation and recycling components of the waste value chain. Bingo operates under a very similar business model to Cleanaway Waste Management Ltd (ASX: CWY).

Back in February the company painted a bleak forecast as it announced that it expects underlying EBITDA for FY19 to be broadly in line with the previous year. For a so-called “growth story” that traded on a P/E ratio of approximately 20, zero growth is a big no-no. However, the Bingo share price has now climbed almost 100% since its February low and painting a recovery story.

The company has several positives to expect for FY20. For example, Bingo had a number of recycling facilities in NSW and Victoria offline for redevelopment and other enhancements to operational efficiencies. With more key assets coming back online and a strong balance sheet, Bingo could be a growth story to add to your watchlist for FY20.

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Motley Fool contributor Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019



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