Saturday, August 25, 2018

Aviva On Track And Undervalued

European insurers have continued to underwhelm this year, with names like Prudential PLC (PUK), AXA (OTCQX:AXAHY), Legal & General (OTCPK:LGGNY), and Aviva (OTCPK:AVVIY) all down on a year to date basis, making companies like Ageas (OTCPK:AGESY) more the exception than the rule. While there are company-specific issues in play and some macro concerns (including Brexit), a bigger issue is the underwhelming pace of growth in both reported earnings and book value.

As it concerns Aviva, although these shares have not done as well as I would have expected, I continue to believe that slow and steady can win the race. The company has made what I believe is a good case for how it will grow in the U.K. life market, and continues to invest in growth opportunities in insurance markets like Poland. Although I don’t expect exceptional growth, low-to-mid single-digit earnings growth is enough to support a fair value in the mid-teens (for the ADRs) and management remains committed to returning capital to shareholders.

Read more here:
Aviva On Track And Undervalued

No comments: