Admiral Share Discussion Threads

[masurenguy] 11/11/2011 00:56

A recent TMF article on ADM which appeared prior to this weeks IMS. Unfortunate timing but still a good summary of the bull case with an even better prospective trailing yield of 8.3% based on last years payout
or possibly even 9.9% this year if the H1 increase is repeated at the year end. Of course the dividend could
be cut if margins fall but even if it was reduced by 25% it would still be circa 7.4% in the current year.

This could be today's no-brainer

So what might Neil Woodford and Warren Buffett buy now? Here's one no-brainer idea for them and of course for you as well: Admiral (LSE: ADM). As you may already know, Neil Woodford likes shares with high, rising and reliable dividends. Warren Buffett meanwhile likes shares with tip-top management and strong competitive positions. Buffett also likes insurance companies, which is lucky for him as Admiral is one of the country's largest motor insurers. Anyway, here are ten facts about Admiral you might want to consider while everyone else panics about Greece:

1. It has grown from nothing to become a £3 billion FTSE 100 share in 20 years;

2. It floated during 2004 at 275p and the price reached £17 earlier this year;

3. It has expanded rapidly, despite the recession and Greece. Between 2006 and 2010, profits and the dividend jumped more than 80%.

4. It continues to grow, with first-half profits this year up 27%;

5. It has consistently reported underwriting profits, unlike most of its rivals;

6. It hasn't needed to retain capital to grow, and therefore regularly distributes about 90% of its earnings as ordinary and special dividends;

7. It offers a trailing total dividend of 74.6p per share and 6.7% yield at £11;

8. It has a forecast P/E of 13 for 2011 and 11 for 2012;

9. It is run by founder management that has an enormous £540m riding on the share price, and;

10. It has seen its share price fall since the summer on fears of rising costs, and Greece.

Enough there for Woodford and Buffett to pile in? Well, they'll need to do their own further research, just like you and me. However, there are some dangers. Insurance is an inherently risky and competitive industry, and is not known for pleasant surprises. Admiral also pays out almost all of its earnings as dividends, so if costs rise and profits fall, the payout would come under threat. But on the face of it, this looks to be a no-brainer opportunity to buy a well-run blue-chip at a very reasonable price. I mean, you can leave your cash in the bank earning nothing, or you can buy shares in Admiral, enjoy a dividend income of 6%-plus, and be exposed to the company's future growth.

[the ballcock] 10/11/2011 16:31

Looks like it wants to go to 800 pennies or lower, will have another look tomorrow.

[the ballcock] 10/11/2011 16:10

Not sure them boys in the FT are much good. Too lazy to go looking for it. OFten the punters here are better.

[senator] 10/11/2011 15:45

Just put 'FT Admiral' into google and it is the first article.

Simples....oops wrong comparison site!!

[the ballcock] 10/11/2011 15:27

No prob mate, thanks.

[essentialinvestor] 10/11/2011 15:21

Got my wrist slapped last time I did that TBC.
From memory you can sign up and get access to 10 free articles,
just put Admiral into the search box.

Although the points may have been raised elsewhere, you can look at the
Telegraph business section without having to register.

[the ballcock] 10/11/2011 15:06

CAn you post that article mate?

[essentialinvestor] 10/11/2011 15:04

It goes way deeper than just downgrades imv - the FT cover it well today.

[senator] 10/11/2011 14:37

Kibes...don't forget that Admiral owns Confused.com so gets a lot of it's own business. The others cannot say the same.

[essentialinvestor] 10/11/2011 14:36

They can kiss goodbye to the FTSE100 at the next review it appears.

[the ballcock] 10/11/2011 14:35

COME ON U ADM

[deanroberthunt] 10/11/2011 14:16

a ftse stock 35% down in just 2 trading sessions.

[kibes] 10/11/2011 12:26

There is too much competition in car insurance. Confused.com, Compare the meerkats, Go compare, moneysupermarket etc I am sick of their non-stop adverts on TV. Where is the money coming from to pay for this endless and annoying advertising campaign? Eventually from premiums of course. But the fact that everyone can now easily get the cheapest deal must surely force the insurers into a downwards death spiral for premiums? Or otherwise they won't get any business? And there are too many comparison sites as well.

[deanroberthunt] 10/11/2011 12:08

everythings relative, to Buffet, probably not, to you.............ahem

[the ballcock] 10/11/2011 12:06

IS hectorp a pro ?

[deanroberthunt] 10/11/2011 11:57

let us know when that is H :)

[hectorp] 10/11/2011 11:25

well, it's halved over 6 months! so forward P/E will be looking quite attractive. Not my 'sector' though but might take a few. Wait for the intraday to rise from the down channel.

[deanroberthunt] 10/11/2011 11:23

Burger King was bought out for just under 10x EBITDA, and that included a hefty debt position...

So even if one says just 8x , then you're looking at £3.2bn here +