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QBE $11.01

D day .........Feb 24 Report

  1. Michaelirish

    19,560 Posts.
    42
    It is getting closer........................

    Here is the Motley expectation

    "
    • 0
      mce-anchorinShare
    It was a bumpy ride for QBE Insurance Group Ltd (ASX: QBE) shareholders in 2014. The share price fluctuated wildly between $10 and $13, punctuated by an assortment of violent surges and plunges throughout the year. 2015 has started in similar fashion as the share price fell to a low of just $10.13 in January but has since recovered to trade at over $11.60 on Friday February 13.
    February 24 – D-day for QBE Shareholders
    QBE will report its full-year results on February 24 and shareholders have reason, for the first time in many years, to be relatively confident. Why?
    1. QBE hasn’t lowered its forecast
    QBE shareholders have had a stress-free December and January, which is a nice change from years past when the company has traditionally announced downward revisions to earnings guidance. While this isn’t a sure sign of a bumper second half performance, it’s certainly a positive.
    1. QBE’s revised forecasts appear achievable
    QBE’s revised financial year targets are gross written premium in the range of $16.6 – $17.0 billion, net earned premium of $13.9 – $14.2 billion, insurance profit margin of 8.0% – 9.0% and a net investment yield of 2.4% – 2.7%. These targets have been downgraded from 12 months ago, so any signs of deviations to the low-side will be bad news for the share price.
    1. QBE is more resilient now
    QBE’s new management team has sought to strengthen the group’s capital position following a couple of lean years. A range of capital initiatives have been launched to boost balance sheet resilience and give the group more flexibility.
    An oversubscribed equity raising was completed in September, a $700m debt issue was completed in November, the group’s US agency businesses was sold for $300m in January and more asset sales are planned for 2015.
    These will “deliver significant additional cash and capital resources that will substantially improve the Group’s financial flexibility and ability to better withstand a reasonable range of downside scenarios”.
    Bonus Upside- QBE’s big dividend
    If QBE can get back to paying a dividend of similar magnitude to that in 2011, the dividend yield based on today’s price is approaching 12%. Other insurance companies like Insurance Australia Group Ltd (ASX: IAG) and Suncorp Group Ltd (ASX: SUN) offer higher immediate yields but their future potential pales in comparison to QBE’

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