Insurance Australia Group is under Algo Engine buy conditions and is a current holding in our ASX 100 model portfolio.
We see price support for IAG at $7.50, based on 5 – 8% EPS growth into FY20, 4.8% dividend yield and the potential for an increase to the on-market buyback in the New Year.
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.
Insurance Australia Group has been added into the ASX 100 model portfolio following the recent Algo Engine buy signal.
We see buying support for IAG at $7.50
IAG goes ex dividend on the 21st of August for $0.20. Adding a Dec $8.00 call option will generate an additional $0.30 per share of income.
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.
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.
Insurance Australia Group, (IAG) is retracing into a price zone that provides a discounted entry point to begin accumulating the stock.
We see a cluster of support dating back to December of last year on the daily charts and good value between $7.00 and $7.30
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.
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.
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%.
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