Author Topic: ADM.L - Admiral Group Plc  (Read 14850 times)

petec

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Re: ADM.L - Admiral Group Plc
« Reply #20 on: February 24, 2016, 06:30:13 AM »
I've been following UK insurers, and Admiral have done nicely, albeit without blowing the doors off in anyway.
In my view, Direct Line aren't really competitive. They still have a substantial direct selling operation (with all the costs that come with this) and got hammered by the rise in personal injuries trend from 2008. They aren't effective. The other competitors are RSA (a bit big with all kinds on international problems) and esure (in my view, a very good bet).
Just on RSA - I don't suppose anyone is following this? Basically, RSA had a massive blow-up thanks to a manager in Ireland going rogue, combined with some non-core operations producing mediocre returns. Since 2013 however, they have sold off the poorly performing non-core divisions, they have plugged the hole in the Irish operation, raised equity and have remained broadly on track with their original plan to return to profitability. 2015 results are out tomorrow, and the market expects 38p in earnings based on a 400p share price, giving a current PE on depressed earnings of about 10. 2016 should finally see RSA throw of the neutral/negative earnings from the non-core operations with the Irish operation finally start breaking even. I would expect that normalized earnings are at least 45p, more likely to finish 2016 at 50p, putting the company on a PE of 8. With the non-core sales finally completed, and with some retained earnings, I would also expect them to finished 2016 with tangible book ratio of about 1.2. To give you some perspective on what this company is really worth, Zurich offered 550p a share to acquire RSA, but had to pull out after taking some lumps of their own in China.

On a current price of 400p, if the company can finish 2016 with 50p earnings, then with an industry standard PE of 12, I would be expecting a share price of about 600p, giving a 50% upside within 1 year.

Thanks for this.   Will research.

The share price graph is very amusing.


Ballinvarosig Investors

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Re: ADM.L - Admiral Group Plc
« Reply #21 on: February 25, 2016, 03:04:39 AM »
I've been following UK insurers, and Admiral have done nicely, albeit without blowing the doors off in anyway.
In my view, Direct Line aren't really competitive. They still have a substantial direct selling operation (with all the costs that come with this) and got hammered by the rise in personal injuries trend from 2008. They aren't effective. The other competitors are RSA (a bit big with all kinds on international problems) and esure (in my view, a very good bet).
Just on RSA - I don't suppose anyone is following this? Basically, RSA had a massive blow-up thanks to a manager in Ireland going rogue, combined with some non-core operations producing mediocre returns. Since 2013 however, they have sold off the poorly performing non-core divisions, they have plugged the hole in the Irish operation, raised equity and have remained broadly on track with their original plan to return to profitability. 2015 results are out tomorrow, and the market expects 38p in earnings based on a 400p share price, giving a current PE on depressed earnings of about 10. 2016 should finally see RSA throw of the neutral/negative earnings from the non-core operations with the Irish operation finally start breaking even. I would expect that normalized earnings are at least 45p, more likely to finish 2016 at 50p, putting the company on a PE of 8. With the non-core sales finally completed, and with some retained earnings, I would also expect them to finished 2016 with tangible book ratio of about 1.2. To give you some perspective on what this company is really worth, Zurich offered 550p a share to acquire RSA, but had to pull out after taking some lumps of their own in China.

On a current price of 400p, if the company can finish 2016 with 50p earnings, then with an industry standard PE of 12, I would be expecting a share price of about 600p, giving a 50% upside within 1 year.

Thanks for this.   Will research.

The share price graph is very amusing.
Up 12% today.  Was really surprised the market was killing this yesterday when it was clear everything was improving nicely.