Prudential – What really matters in a Stock (Is insurance company that safe?)

What makes a company safe and secure? On how big the brand is? Or it is based on what we see and hear?

Founded in 1848 in London | 24 Million insurance customers | 562 (Pound) billion of asset under management | Asia, US, UK |

” Comparison will be done with Great Eastern, as both companies holds the biggest market shares & are listed on SGX “

1)  IDENTIFICATION OF COMPANIES THAT ARE UNDERVALUED.

  • Price to book ratio : 2.693 (1.693 times price above fair value)

2)  LEARN ABOUT THEIR NUMBERS

  • Debt To Equity : 69.78% ( 11 times higher than Great Eastern) – numbers are taken from Financial Times
  • Growth Performance : 12.26% ( Growing faster than Great Eastern by 25% annually)
  • Current Ratio : 1.048 (Lower than Great eastern by 1)
  • Cash flow per share : 0.7729
  • Weak management ability ( Non constant growth in dividends payout | Losing market shares – Drop in revenue over the 5 years | Decreasing gross profit & net income margin | Poor cashflow in its investing and financing divisions )screen-shot-2016-12-01-at-1-09-11-pm

    screen-shot-2016-12-01-at-1-09-05-pm

    Sgx.com

3) TECHNICAL ANALYSIS

This year market have tried to reach 2014 pricing but had failed to do so as it finds demand at $16. Market is currently showing sign of reversal to the upside as it breaks the previous structure at $19

If market manages to build momentum on its demand, it would have a higher probability to trend higher. Current Volume surge in this month might be due to its institutional buyback of shares that is causing the elevation in stock price.

4) Would I be vested into it?

My answer as of now would be a No. Financial Numbers are not appetising for an entry. Additionally, Prudential have increased its payout ratio ratio this year even thou it is doing bad – Probably to maintain its attractiveness in its high dividend per share.

Some information or “light” to its stock price:

As this would be a sensitive post (as most of my friends are working in this company) – my analysis are based on the number that you could too find on the web and ITS MY SUBJECTIVE “noob” point of view 🙂

“+1 Knowledge point”

my photos of china will be up on the next post…. I promised 🙂 im too lazy today

 

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