Wednesday, June 3, 2015

Seeking Alpha: AXA On The Right Track

When can a call be both right and wrong? When a significant move in foreign currency saps the strong performance of a company's shares on its home exchange and the ADR goes more or less nowhere. That is what has happened with AXA (OTCQX:AXAHY), as the shares of this global insurance giant have done quite well on the local market (up more than 25% since my last article) and better than peers/rivals like Allianz (OTCQX:AZSEY), Generali (OTCPK:ARZGY), Prudential Plc (NYSE:PUK), and Aviva (NYSE:AV), but the ADRs are basically flat after the significant move in the U.S. dollar-Euro exchange rate.

AXA is executing to plan and there is a lot to like about the company's operations. The company is successfully replacing risky (for them), capital-intensive products with profitable, less capital-intensive products and the company's P&C operations are doing well. The company's significant exposure to Asia is also helping, as these operations are contributing significant growth.

At current exchanges rates these shares look like an okay holding. The ADRs do look undervalued and the company pays a good dividend that is likely to increase in the coming years. If the dollar were to weaken, investors could recapture some of that "lost" performance but that is an inherently unpredictable call.

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AXA On The Right Track

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