This ASX finance stock is so hot right now. Which bank?

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Banks are likely to be celebrating after 12 increases in interest rates within 13 months, as they earn extra money from each person who holds a mortgage.

Nonetheless, the stocks of ASX pertaining to major financial firms have experienced a downturn this year due to concerns surrounding a potential downturn of the economy, causing hindrance to their operations.

Take National Australia Bank Ltd (ASX: NAB) as a case study, its shares have experienced a decline of 12.8% from the starting point of the year. Similarly, Westpac Banking Corp (ASX: WBC) is currently facing a drop of 9.4%. On the other hand, Commonwealth Bank of Australia (ASX: CBA) has also experienced a downfall percentage of 4.49%.

However, there is a prominent financial institution that is going against the current pattern.

A Bank Not Among The Big Banks

Macquarie Group Ltd (ASX: MQG) has a market value of $71 billion, putting it in the same league as the four largest companies.

Nonetheless, its method of conducting business is remarkably distinct from conventional retail banks.

According to the blog post by Michael Gable, who is the managing director of Fairmont Equities, the source of earnings of the company is spread out over several financial markets and geographical locations. In fact, approximately 66% of their revenue comes from overseas markets.

The company has a wide variety of business activities, including lending, helping clients buy and sell stocks and investments in both stocks and credit. However, the most significant part of their business is focused on managing assets with low capital requirements.

This is the reason why the value of Macquarie shares has been able to escape the recent negative trend that the other major banks have experienced.

The shares have increased by 10.65% so far this year and also provide a dividend yield of 4.1%.

However, what happened before is already done and over with.

If you're thinking about purchasing Macquarie shares at present, what lies ahead for the enterprise's future?

"A Tempting Chance To Enter."

According to Gable, there are several factors that could lead to higher than expected earnings in the fiscal year 2024.

According to him, the prosperity of Macquarie will be greatly impacted by the Commodities & Global Markets (CGM) division.

According to Gable, it is possible to anticipate a downside risk for Macquarie's earnings in FY24 since the volatility in some of its CGM operations reduced during 4Q23.

It's important to keep in mind that we've seen similar risks in previous years that never actually happened. Additionally, the people in charge tend to be cautious when it comes to predicting how commodities will perform.

The customer segment of the CGM unit experienced significant growth of approximately 30% during the recently concluded fiscal year.

Gable predicts that the CGM business will be driven by fundamental changes in the energy market in the upcoming year.

Some of the factors that contribute to the demand for MQG's services are the limitations of pipeline and storage infrastructure in the United States, the increasing trade of liquefied natural gas in the global market, and the shifts in weather patterns around the world. MQG stands out in its expertise in transporting gas and power to areas where they are in high demand. Another factor that has an impact on the demand for MQG's services is the growing trend towards using wind, solar, and nuclear energy sources.

Based on all of this information, Gable is confident that it is a good idea to purchase shares in Macquarie at the present moment.

According to him, the current valuation of Macquarie shares is at a 1-year forward price-to-earnings ratio of approximately 14.5 times. This is lower compared to its previous highs of around 20 times.

We think that the present fragility may offer a favorable chance to enter.