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IAG - Insurance Australia Group

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Some brokers I believe from AFR reports, are suggesting IAG is overpriced and may retreat to $4.10.

Looking at a 3 year weekly chart they may not be far out.

I will hold even though it looks a bit toppy, and may add closer to their prediction should it eventuate, as $4.00 seems like good support, being previously resistance in the past but comprehensively broken recently.



gg
 
Garpal Gumnut said:
Some brokers I believe from AFR reports, are suggesting IAG is overpriced and may retreat to $4.10. ...gg
Click to expand...
@gg
You are spooking the punters and helping to produce a self-fullfilling prophecy!

"Species associated with stampede behavior include cattle, elephants, blue wildebeests, walruses, wild horses, rhinoceros and humans." Thanks wiki.
 
burglar said:
@gg
You are spooking the punters and helping to produce a self-fullfilling prophecy!

"Species associated with stampede behavior include cattle, elephants, blue wildebeests, walruses, wild horses, rhinoceros and humans." Thanks wiki.
Click to expand...

I never believe what's in the papers, but the chart is looking toppy in the medium term.

I like you hope the mob don't go with the brokers, but I'll buy when it pauses closer to $4.00 if they do.

Love the wiki quote.

gg
 

I dont know about it being Toppy, Its been in a year long uptrend . I got a signal to buy at $4 with my mech. system so i dont need to have an opinion on it..But the chart looks good.
 
burglar said:
@gg
You are spooking the punters and helping to produce a self-fullfilling prophecy!

"Species associated with stampede behavior include cattle, elephants, blue wildebeests, walruses, wild horses, rhinoceros and humans." Thanks wiki.
Click to expand...

wombat40 said:
I dont know about it being Toppy, Its been in a year long uptrend . I got a signal to buy at $4 with my mech. system so i dont need to have an opinion on it..But the chart looks good.
Click to expand...

It could be the end of a wave 3 Elliott atm, so a retracement to $4.10 as a wave 4 would make sense.





gg
 
Way over valued IMO.
However with that nice high close on your weekly and the trend.
Wouldn't be betting against it just yet.
 

Look at the chart for IAG, SUN, AMP etc and they have been universally bullish since the Aug profit report. It makes sense for a bit of hesitation new in anticipation of the Feb reporting season. Some of the rise was probably due to PE expansion (since the end of the Euro crisis), but some will start to question the baked in EPS rises over the next few weeks imho.
 

A good call skc.

I followed your advice and hung in.



There seems considerable volume support for IAG at present.

gg
 
One broker I subscribe to had IAG as a short at around $4.60. I had a small short dabble and lost as it became clear the bullish move hadn't ended so flipped and went long to $5.56 and sold, wasn't brave enough for the last move up. Well done there gg.

P/E of IAG now surely way over the top at around 22.56 (Yahoo data), it was at 12.3 in October according to this comment from the Motley Fools website:

"IAG is currently trading on a prospective P/E ratio of 12.3, compared to competitors QBE Insurance Group (ASX: QBE) on 11.1, and AMP Limited (ASX: AMP) on 12.8. Analyst forecasts are pointing to a potential dividend yield of around 5.2%, likely to be fully-franked"

I went short again last week at $5.76 as I think the wind is about to be taken from the IAG (and market) sails for a stint, so far so good but let's see how this goes. Eyese firmly planted on a market correction and good opportunity to go long on IAG for cap gain and future dividends. At the moment seems limited upside if any for C/G.

Others thoughts on IAG longer term?
 

You should probably consult your broker's report for P/E rather than Yahoo. 2013 consensus EPS ~46c so PE is 12.5 or there about.
 
skc said:
You should probably consult your broker's report for P/E rather than Yahoo. 2013 consensus EPS ~46c so PE is 12.5 or there about.
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Thanks for that.

Only did that for quick access, at the time they had IAG at a P/E of 19.2 with an industry average around 12.5 as at Oct 2012, obviously based on previous earnings. So at that time they saw IAG as overpriced with better industry value elsewhere.

Currently they haven't an update and I haven't checked directly so thanks for that. However I still believe a market correction is on the way and IAG is very toppy struggling to break around $5.85. I definitely may be wrong of course but I believe it is a low risk short at this point, just for how long is the question with the dividend chasers out there. However how high would it get pushed to before funds think it is too expensive?

Clearly others saw IAG as toppy at much lower prices in January 2013, so now at over $5.60 seems a low risk short entry.
 
Short looking better today with a lot of selling pressure.

In comparison to peers IAG is clearly outperforming is it really that much better than AMP, SUN and in particular QBE (way down)?
 

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I have been looking at the various insurance companies for my SMSF and so far IAG looks most attractive of the ones I have cast my eye over, (SUN, QBE).

Does anyone have any views from a FA point of view they would care to share?
 
galumay said:
I have been looking at the various insurance companies for my SMSF and so far IAG looks most attractive of the ones I have cast my eye over, (SUN, QBE).

Does anyone have any views from a FA point of view they would care to share?
Click to expand...

Both SUN and IAG at the moment are enjoying pretty good times. Few catastrophic event/claims leading to excess capital and special dividends from reserves (which the market loves), lower reinsurance rate. Although absolute growth in premium is low, competition appears to be mostly oligopolistic in nature.

I'd argue that insurance is a cyclical industry, and it's perhaps better to buy at the bottom than the top of the cycle. The best time evidently is when a disaster or two struck.

QBE is another story. It's got multiple disasters of it's own making. But it does offer more return on more risk.
 
IAG trying to break out of an ascending triangle.

Failed again this morning.

May come down to support line one more time before moving up.

Keeping an eye on it.

 
I think this ascending triangle will fail.

IAG fell 19c (about 3%) (bigger than usual daily movement) today on bigger volume and closed on its lows.

It penetrated the support line slightly and closed on it.

It could be worth watching still but in MHO it may just trade within a range $5.40 - $6.60 for a while.

 

The market readthru Suncorp's report today which tempered down insurance top line growth to just low single digits. The outlook comments by IAG when they report will probably drive the price action.
 
It's gone XD but also been kept down since the market update.

Am I right in the assessment that 5.75 will need to hold or it could fall further?

Yield looks good on this one...
 
After confirming it is in a yearly downtrend, breaking down through solid support at 5.30 and hitting a yearly low. It makes the announcement to die for - BERKSHIRE HATHAWAY takes a stake.
The Buff always was a bit of a Technical bullier.
Guess that support is gonna hold after all, with an insurance play like that!
 
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