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
