I blog about Allianz 2 years ago, at that time it was traded below RM4.00, I keep highlighting Allianz after that but it share price only appreciated recently only. I vet through some of the recent analyst's reports on it, amazing to notice that they (so called analyst) still assume that Allianz is a smaller company as compare to LPI and Manulife. What a big mistake they made, indeed Allianz is the biggest general insurer in Malaysia in term of underwriting premium, and now also in term of net profit.
Although LPI is traded at around market capital around 3.0 billion and making around 40 million last financial quarter, by annualize it going to make around 160 million for FY12.
Allianz is making 57million for the last financial quarter, look like it going to make more that 200 million for FY12. And it only traded at market capital around 2.4 billion.
Investor priced LPI using dividend yield model, that is why it fetch a very high PE valuation.
Allianz is set to grow after rationalizing of business previously acquired from CIMB, and put in place better underwriting discipline. It is a matter of time Allianz will start to pay good dividend, then it will be traded at market capital higher that LPI. The logic is simple, end of the day it is the net profit that does matter. Although a friend of mine keep telling me that net asset is a more accurate measurement for insurer, but I choose to follow the net profit method. You can tell me anything, but to me net profit or better still cash flow
Previously I also mentioned that it is a matter time market capital of Hartalega will be higher that LPI, QL ........a bunch of them. Seem I am correct at the moment. The issue is still haunting Allianz is the tight liquidity.
As I had mentioned a couple of time that patience is the only advantage a retail investor possess.
Kossan Treasury Share
10 years ago
Is this Allianz the big insurance company?
ReplyDeleteteak investments
2ndbrother, I like to congratulate you on Allianz. Your conviction with your investment thesis had finally paid off. :)
ReplyDeleteDear Heineken Pilsener, thanks. No news from you for long time, how are you? I vested in Allianz, but my biggest investment still is Hartalega, which also perform very good.
ReplyDeletePatience is important. We must able to foresee ahead of general investors to make handsome profit, however how long general investors to appreciate is another matters. I am long enough in the market, use to in out and in out, after sometimes, I realized that buy and hold will be more fruitful if holding the correct stock.
I also hope that most of readers follow my blog can make handsome profit. I have been blog for 3 years, even though I write too little posts than other blogger, I make only few calls. This is similar to my investing style that bet on few good stocks.
Life if pretty good so far. I am leaning towards buy and hold these days as well (maybe I will change my mind if a big bear comes). I reviewed my trades over the years and realized that I lost far more money getting in and out of market corrections than buying and holding quality stocks through thick and thin. But of course, the pre-requisite of such strategy is buying quality companies at a fair price.
ReplyDeleteThe realization of Allianz's fair value provides a very significant meaning to me. Before this, I always thought that illiquid stocks may never trade at fair value because institutional investors do not want them. But I guess I was wrong, I held to this bias against illiquid stocks until recently where many quality stocks which are thinly traded but still being given a rich valuation by the market.
For all the stocks that you discussed, I kind of followed you into Hartalega when I read about your description about its competitive advantage. I bought it around PE of 10 (again, the market was undervaluing a world class glove company without any strong reason) and sold it around 15/16 PE. I try not to look at Hartalega share prices after that because maybe I will get upset for selling too soon.
Anyway 2ndbrother, I believe many readers enjoy reading your blog. Your investment blog is unique in the sense that it is very direct, straight to the point and very "tactical". Keep up with your good work!
Hi Heineken, buy at low PE then sell with higher PE is not the way to make good profit, at least to me. You can refer to my previous post on "Common profit uncommon profit" on how to make good profit. A few years back, a friend of mine keep telling me to buy a group of low PE companies like Ekson, BP Plastic,.....
ReplyDeleteI told him not to buy, but he did not accept, eventually sold them at lose.
Hartalega going to make more profit for years to come, it will be a waste if sell now. That is the reason I still hold to my position.
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