SUN - Suncorp Group

[Julia]

Re: SUN - Suncorp-Metway

Did any of you holders consider getting out when it rallied to $16 ish and waiting until there is some sort of definite uptrend again?
Seems pretty risky to be hanging in there in the hope of SUN becoming a takeover target.

 

[Garpal Gumnut]

Re: SUN - Suncorp-Metway

Did any of you holders consider getting out when it rallied to $16 ish and waiting until there is some sort of definite uptrend again?
Seems pretty risky to be hanging in there in the hope of SUN becoming a takeover target.

I feel there is more downside for SUN yet and am looking at adding to my holdings when it drops a bit further. Its a good dividend hold at present.

Enclosed is a chart, a monthly since 1997.

SUN has managed to close above the long term trend line
From 1997 (a)

If it doesn't find support soon and goes below this line I can
See it getting support at $8.80. (b)

If it does fall below $9 and those who missed its rise above $9 in 2001
Will jump in and provide support.

Moreover in a catastrophe the next support is $8 a price about which it traded for 3 years between 1998 and 2001.(c)

gg

 

[nomore4s]

Re: SUN - Suncorp-Metway

They have to start to increase earning to maintain the dividend but I'm pretty sure they can maintain 2009 divi at 107 cents due to low pay out figures in previous years.

And this doesn't send warning bells for you?

More than happy to hold....today's ann was somewhat expected by the market, and subsequent
price action was pretty much a confirmation of the support at around $11...today's lows were
about the same as we saw 4 months ago.

We have seen the worst for SUN and it wasn't that bad....for those of us that got in cheaply
in the last 5 months or so.

Todays ann was somewhat expected by the market?
That's why the sp closed down by over 13%? If the market was expecting that there is no way the reaction would have been as bad as it was today.

If I was a shareholder I would be very worried about support at $11 holding. All we are going to need now is for 1 bank to cut their D/E.


PS - I think we may get a short rally to try to fill the gap and then another serious attempt at the $11.00 support area.

 

[So_Cynical]

Re: SUN - Suncorp-Metway

And this doesn't send warning bells for you?

Todays ann was somewhat expected by the market?
That's why the sp closed down by over 13%? If the market was expecting that there is no way the reaction would have been as bad as it was today.

Right so a 50% fall in profits equals a 13% fall in the share price?

No it don't...so the market had already factored most of it in, jezz and i posted a
chart and all ...we are back to where we were 4 months ago, back to support.

Garpal u say 8.80...i say bollocks, good luck waiting for that order to get filled.

 

[nomore4s]

Re: SUN - Suncorp-Metway

Right so a 50% fall in profits equals a 13% fall in the share price?

No it don't...so the market had already factored most of it in, jezz and i posted a
chart and all ...we are back to where we were 4 months ago, back to support.

Garpal u say 8.80...i say bollocks, good luck waiting for that order to get filled.

We will have to agree to disagree on this.
Look at the gap down today, to me that isn't factored into the sp. Stocks that drop 13% in a day on a bad ann don't have it factored in imo.
A 50% fall in profit doesn't have to equate to a 50% fall in the sp.

When was the last time SUN lost over 13% in a day?

While support at $11.00 has held so far, I for one am not game enough to say for certain it will continue to hold. When the banks report next we may yet see more bad news come out.

 

[So_Cynical]

Re: SUN - Suncorp-Metway

We will have to agree to disagree on this.
Look at the gap down today, to me that isn't factored into the sp. Stocks that drop 13% in a day on a bad ann don't have it factored in imo.
A 50% fall in profit doesn't have to equate to a 50% fall in the sp.

While a 50% fall in profits don't equal a 50% fall in SP...im sure it don't equal
a 13% fall...today's fall....and as for the factoring in ill quote days ann.

http://www.suncorp.com.au/suncorp/shareholders/_media/pdf/asx/Market_Update_31Jul2008.pdf

The update follows a review of preliminary unaudited financial information and completion of actuarial valuations in the general insurance and life risk businesses.
The Group now expects to be at the top end of the previous profit forecast for its banking business.

The banking part of the business actually increased profits.

Suncorp‟s banking business expects to increase full year profits before bad debts, tax and one-off items

And bad debts are negligible.

The full year bad debts expense is expected to be between $70 million and $75 million.

Overall there's alot of positives in this ann, considering all the financial doom and gloom.

 

[Garpal Gumnut]

Re: SUN - Suncorp-Metway

Right so a 50% fall in profits equals a 13% fall in the share price?

No it don't...so the market had already factored most of it in, jezz and i posted a
chart and all ...we are back to where we were 4 months ago, back to support.

Garpal u say 8.80...i say bollocks, good luck waiting for that order to get filled.

There is considerable distribution going on at present. The price is gapping down on higher volume. SUN is breaching long term trendlines. I think it is brave not to expect the sp to further fall.

SUN at $11.53 is a hell of a lot closer to $8.80 than it is to $22, its highs just a short time ago.

The institutions are sh*****g themselves at present and fear reigns. They will dump underperformers.

It will go down further I'm afraid, but it should recover eventually, just not yet.

As far as their investment arm, I follow the asx announcements closely using them as a filter in a bull market on buys and in a bear on sells, and some of SUN's punts have been woeful, a bit like AMP's, who will be next in line to get whacked.

Blind Freddie could have done better.

gg

 

[dan-o]

Re: SUN - Suncorp-Metway

this is starting to look like great value. One of the best div yields going. Garpal this is heading down the path you predicted. how much further do people think it will go?

 

[Calliope]

Re: SUN - Suncorp-Metway

Even SUNPB (hybrid) which has been holding up very well took a big hit today. Things don't look too flash.

 

[ROE]

Re: SUN - Suncorp-Metway

I got some more at $10 last week, look like I acted too soon
But I have another order in already for $8.50 if it dropped that far.

100K of SUN will do me nicely in 5-10 years from now

 

[ronnieling]

Re: SUN - Suncorp-Metway

this is starting to look like great value. One of the best div yields going. Garpal this is heading down the path you predicted. how much further do people think it will go?

There was some interesting (and rather bearish) commentary on Suncorp's loan book in todays Australian which spouted some alarming figures. Their loans in construction and development rose 42% this year and as asset valuations get written down across the board, that $6.2bn exposure could start to become worrying. A 1% rise in their impaired loans will wipe out the 09 profit and a 2% rise will slash profits for the entire group.

I do own shares in Suncorp for the impressive div yield but that could get wiped out in the not too distant future.

 

[Garpal Gumnut]

Re: SUN - Suncorp-Metway

this is starting to look like great value. One of the best div yields going. Garpal this is heading down the path you predicted. how much further do people think it will go?

Sun is in big big trouble, I don't have much to add than to my previous post.

Its broken through that long term trend line, shown on this monthly chart.

And it has continued to drop below $10 as shown on the weekly.

I'll revise my suggested entry point to $7.10 as it is falling like the proverbial stone.

That is at the previous support in 2000.

The volume seems to have been high in this downtrend, its gapping, and its lows imo have not been reached.

The monthly doesn't show any real support at its present sp. It did close today off its lows though.

Lets hope it doesn't end up as roadkill.

gg

 

[explod]

Re: SUN - Suncorp-Metway

I have family with most of their cash in SUN term deposits. Are such instruments at risk here too.

 

[freddy2]

Re: SUN - Suncorp-Metway

Just reading the most recent financial results the thing the sticks out is the grossly excessive executive renumeration including short term incentives. These sort of payments are one of the main reasons the financial markets are crashing, a misalignment of employees and shareholders interests.

 

[michael_selway]

Re: SUN - Suncorp-Metway

There was some interesting (and rather bearish) commentary on Suncorp's loan book in todays Australian which spouted some alarming figures. Their loans in construction and development rose 42% this year and as asset valuations get written down across the board, that $6.2bn exposure could start to become worrying. A 1% rise in their impaired loans will wipe out the 09 profit and a 2% rise will slash profits for the entire group.

I do own shares in Suncorp for the impressive div yield but that could get wiped out in the not too distant future.

HI yeah sounds scary

Earnings and Dividends Forecast (cents per share)
2008 2009 2010 2011
EPS 59.8 114.2 126.2 137.2
DPS 107.0 107.0 107.0 111.0

Date: 15/9/2008
Author: James Chessell
Source: The Australian Financial Review --- Page: 54
Insurance analysts are expected to scrutinise the financial performance ofSuncorp-Metway in mid-September 2008. Speculation has increased about a takeoverof Suncorp-Metway by large Australian insurance companies and banks due,predominantly, to a note issued by a Citigroup insurance analyst. Nigel Pittawayquestions the company's equity position among other matters

Date: 11/9/2008
Author: Anthony Hughes
Source: The Australian Financial Review --- Page: 22
It will be difficult for Suncorp to fund its asset growth program, but CFO ChrisSkilton said on 10 September 2008 that it is achievable. Suncorp has alreadyraised $A1 billion of the almost $A4.5 billion required, with a sale of $A444million of mortgage-backed bonds. Skilton admits that opportunities for newbanking customers may come from the merger of the Westpac and St George banks

thx

MS

 

[gfresh]

Re: SUN - Suncorp-Metway

What about America's AIG ? Would Suncorp have any exposure there? Or Lehman?

Seems like the selling seems to be based more on some people knowing something along these lines, more than just standard falls in financials.

Looks a bit similar to NAB with it's "unexplained" falls above the financials, before it magically announced it's hitherto 'non-direct exposure' to subprime as a wee little $1bn writedown.

 

[ROE]

Re: SUN - Suncorp-Metway

I have family with most of their cash in SUN term deposits. Are such instruments at risk here too.

Your deposit should safe, unless suncorp goes belly up (low probability)
you get all your money before all the share holder.

Fear and panic can drive stock to historic low but as long as it run a profitable business than all thing should be ok.

 

[explod]

Re: SUN - Suncorp-Metway

Your deposit should safe, unless suncorp goes belly up (low probability)
you get all your money before all the share holder.

Fear and panic can drive stock to historic low but as long as it run a profitable business than all thing should be ok.

Thanks for your take on that Roe


Cheers explod


The big worry is what you dont' know and what you know is most often wrong.

 

[blinkau]

Re: SUN - Suncorp-Metway

I am still surprised people are still harping that Suncorp is cheap. On what basis? Maybe if it was taken out by a bidder. If you paid $12 a few months ago you are down over 20%! No matter what that is quite a large loss to take.

The company seems to be a text book example of the exact kind of stock to avoid.

That is just my opinion and we all have our own

 

[ROE]

Re: SUN - Suncorp-Metway

I am still surprised people are still harping that Suncorp is cheap. On what basis? Maybe if it was taken out by a bidder. If you paid $12 a few months ago you are down over 20%! No matter what that is quite a large loss to take.

The company seems to be a text book example of the exact kind of stock to avoid.

That is just my opinion and we all have our own

It's all subjective, if people think it's going bankrupt, it's not going to make money and there is no value in any of the business they hold then there is no value to be found. Suncorp has insurance, banking, real estate,wealth management etc...

but on the other side if people recognize what underlying business it holds and it going through a rough ride at a moment and when those tides are dust and done and these business position itself for the next cycle then
you get to see some value in the business they hold.

Stock is the highest risk you can put your money into and some are willing to take that risk in anticipate for better return 5-10 years from now.

the return may not eventuate but you never know if you never never go