Macquarie Infrastructure (MIG) Stock Recommendation

Macquarie Infrastructure (MIG) have a reiterated Outperform stock recommendation from stock analyst Macquarie Research Equities (MRE). The share analyst have noticed that the MIG share price has risen 4 percent over the past two weeks compared with a return of less than 1 percent return from the index. "MIG's recent outperformance can be explained by a number of factors, including further rallying of long-term bonds in the US, but one of the main talking points for investors is the potential for capital management."

On Friday, ASIC provided MIG relief to extend their buy-back to 17.5% of issued capital. The final hurdle was obtaining shareholder approval which has been obtained through proxy votes for their AGM yesterday. MIG has reaffirmed their 2007 dividend guidance of 20 cents and provided guidance for 2008 of 20 cents. Under the initial buy-back arrangement MIG could purchase up to $500m worth of shares or around 6% of its market cap. Since the buyback commenced on the 3rd October, the group has secured almost $140m worth of shares or around 1.6% of their market cap. The expansion means that a further 340m shares can be bought or around $1.2bn. At the current rate this will take another 15 months. Under the existing rulings the buyback can only continue until the 23rd August 2007, with any further extension requiring ASIC approval. The final condition of the repurchase is the completion of the sale 50% of the US roads to Macquarie Infrastructure Partners (MIP). MIG hopes to have this completed by the 15th December. Once this is completed MRE would expect MIG to review their position with regarding to an ongoing buy-back or a special dividend. Timing on an announcement is always difficult although a December announcement this would co-inside with the interim dividend.Whether a special dividend or ongoing share buyback, MIG is in an enviable cash position which it will continue to pay back to investors.

Macquarie Infrastructure Group Limited is listed on the Australian Stock Exchange (ASX) under stock code MIG. You can view their investor website here. MIG was listed on the ASX on 16 December, 1996. Stephen Allen is the CEO for Macquarie Infrastructure Group. MIG is involved in the investment of toll roads worldwide. Find out the meaning of the recommendations in this primer. Browse for other stockbroker recommendations. Check your charts and good luck with your share trading!