IAG – Algo Buy Signal

Insurance Australia Group is now showing an Algo Engine buy signal and remains a long term holding in our ASX 100 model portfolio.

We see value emerging and consider the $7.50 price range as support and expect buying interest to remain solid.

Look for a move higher into the $8.00+ range and then sell covered call options to enhance the income return.

For more detail on the option strategy, please call our office on 1300 614 002.

 

 

IAG – Finding Buying Support

IAG is under Algo Engine buy conditions and we see support building near $7.10.

The company will report half year earnings on the 6th of February. The market is looking for NPAT to be around $260mn.

We suggest buying IAG and selling an out of the money call option to enhance the return.

IAG goes ex-div 14 cents on the 20th of February.

Buy IAG At Current Levels

In our Opportunities in Review webinar series, we’be been suggesting IAG as a buy below $7.00.

A recent broker note estimates that IAG will have a further $600 million to spend on shareholders, which could come in the form of a $300 million special dividend and $300 million share buyback.

Look for a rally to $7.50 and sell covered call options.

IAG

IAG – buy the dip

Today’s earnings miss in IAG, along with lower guidance into FY19 has seen a sharp sell-off with price moving back to $7.50.

We see long term value for investors who accumulate the stock within the $7.25 to $7.50 range.

IAG goes ex-div $0.20 on the 6th of September.

 

IAG – Opportunity Builds

Although we don’t have a current Algo Engine buy signal in IAG, the stock is in the ASX 50 model portfolio from the original higher low pattern in 2017.

The recent share price retracement, from $8.70 back to yesterday’s low of $7.84, means we have the stock on our radar again.

Strong earnings growth, 5% fully franked dividend yield and an increase to the share buy back program should provide a floor under the share price.

We see IAG as a solid “buy/write” opportunity delivering 10 – 12% annualised cash flow.

 

IAG

 

 

IAG – Buy-write Producing 10-12% Cash-Flow

The key take-away from the this week’s AGM is that IAG remains confident of reducing its cost base by >A$250 million from A$2.5 billion to A$2.25 billion by 2020.

The company also reaffirmed the outlook for 10% EPS growth over the next 3 years.

IAG provides a solid buy-write opportunity with the stock retracing back from recent highs and now finding support at $7.50.

FY19 profit is forecast to be $1billiWn, EPS $0.45 and DPS $$.36, placing the stock on a forward yield of 4.8%.

 

 

 

IAG Posts New All-Time High On Stronger Guidance

Shares of IAG have rallied over 2.5% in early trade, hitting an all-time high of $7.89, as the company lifted their earnings guidance for the year ahead.

The general insurer reported a 23 % increase in net profit after tax, which hit $551 million in the six months to December, helped by price rises in its consumer and commercial insurance products.

IAG also reported insurance margin widened to 17 %, compared with 13% a year earlier. Further, the company lifted its dividend by 1 cent to 14 cents, which will be fully franked and paid on the 29th of March.

IAG has been in our Top 50 Model Portfolio since January of last year.

We suggest investors can sell the 7.50 calls into June for 25 cents. This will increase cash flow into the portfolio and allow for the 14 cent dividend.

Insurance Australia Group