Excel – http://1drv.ms/1nwa0j0
– Fair Value/Market Timing
– 5Y DCF: 25.85 – 29.53 (MOS: 60% – 65%)
– Absolute EY%: Buy under 9.12, sell above 11.10 (MOS: 6.32%)
– ALLIANZ is undervalued in long term.
– I think MH370 incident will only give negative impact to ALLIANZ in short term. So far, ALLIANZ only identified 5 of the passengers are their client.
– For some people, this is a risk, but I view this as an good opportunity.
– ALLIANZ’s dividend payout is extremely low, so never expect good dividend from them. Reasons:
– High capital or surplus retained due to nature of industry
– Stringent regulatory requirement to protect policyholders’ interest
– Managing stringent capital buffer to withstand adverse or unfavorable experience
– Unlike LPI (general insurance and financing on leases), ALLIANZ is heavily dependence on single segment: motor insurance; and also dependence on agent for life insurance. ALLIANZ requires high capital to grow distribution capabilities, and fund new business growth.
– Balance float of outstanding shares is very low: 4.20%.
– My wife and I are considering to buy ALLIANZ with our joint account, while my wife already owned shares of LPI.
– I will continue accumulate ALLIANZ along the way.
Latest Financial – Q1 2014 Financial Report (28 May 2014) http://www.bursamalaysia.com/market/listed-companies/company-announcements/1637065
At the time of writing, I owned shares of ALLIANZ.