Aviva Share Discussion Threads

[wba1] 12/4/2020 18:27

uppompeii;
I think that was the late 90s! The explanation for the decline from that point can best be seen in the L&E takeover in 98/99. They bought it for its creditor business with banks and building societies, and the £150m a year gross premium of the Nationwide BS property insurance scheme. They had lost the lot within 2 years. It started when they refused to give the L&E Sales Director (who had secured the deals with Nationwide and others) equivalent status (they wanted to demote him in effect). He told them where to go and took the large payoff his L&E contract guaranteed. Virtually all the rest of L&E senior management left for the same reason. Aviva were arrogant then and nothing much has changed.

But recovering from 264p is very different to maintaining a £12 share value.

[uppompeii] 12/4/2020 14:52

I hope so, it's got a long way to go to buck the fall from £12 or 13 quid that I remember...albeit more and more hazy..

[wba1] 12/4/2020 09:30

Creditcrunchies;
right about the board, wrong about the sucket stock status. A sucker stock combines a failing business model with incompetent management. A failing model is often shown by a decline in a sum of parts valuation. In the case of Aviva the model remains robust meaning a split of the company would increase its valuation. The implication (when we get past the current crisis) is that there are 3 possible scenarios;

That Aviva management grasp the nettle and take action to unlock the company value, probably by splitting the company in two, into a general insurer and a company competing with L&G. This seems unlikely under Tulloch.

The activist investors who were starting to target Aviva come back and do so properly, achieving the split with or without current management. I suspect this will be the start of change, but not the end.

Takeover, in whole or in part and voluntarily or by hostile approach (Aviva may try to change or preserve independence by selling off, say, the general insurance operation). I have heard the suggestion that potential bidders may be preserving capital and not in the market. Utter rubbish. During the financial crisis the likes of Allianz used their capital to make huge profits by buying into Hartford (for example). Companies like Allianz, Axa and Zurich have huge surplus capital available to buy at fire sale prices. Aviva would just be a light snack for them.

Of course, the board may try just to bumble on in their usual ineffectual way, but they will only avoid the latter two scenarios above if the share price returns (at least) to pre-covid levels - in which case we will all be happy anyway having bought in at current levels. Whatever the mechanism, buying at this level will see value unlocked (one way or another) in the medium term.

[creditcrunchies] 11/4/2020 23:14

This company is always oversold I know of plenty of stocks like that they're known in the business as "Sucker stocks" and the combination of being a dividend stock (now with no dividend) and a sucker stock is not really appealing these are a long term hold at best. You are basically waiting for a board of directors that know what they're doing.

[fez77] 11/4/2020 21:47

Have you abandoned Gold for Insurance CI? Or is Gold still the best Insurance!!!!?

[spcecks] 11/4/2020 14:03

I agree with the write up Aviva have been way oversold and are very cheap for a cash rich company.

[pepi moon] 11/4/2020 12:45

Aviva write up...

[wba1] 11/4/2020 10:42

Covid diagnosis in the UK is at 0.11% of the population, but this is artificially depressed by the limited testing. Elsewhere in Western Europe the only places with a lower diagnosed incidence are in Scandinavia. The rest of Western Europe has a diagnosed incidence ranging from 0.13% in Holland to 0.34% in Spain. Interestingly there is the outlier of Iceland, which is unique in having tested 10% of its entire population and has an incidence of 0.5% diagnosed. To me these numbers suggest an incidence in populations more likely to be between 2% and 5% at present rather than 1%.
Euro numbers overall are pulled down by dodgy East European numbers. And, of course, current testing only determines if you have the virus - not whether you had it previously.

[carpingtris] 11/4/2020 10:42

We're in lockdown so as not to break the NHS.. if new hospitals get up and running them capacity increases which will help when trying to get back to normal life.

And few articles I've read suggest natural immunity maybe far higher than thought.

[tygarreg] 11/4/2020 10:18

An interesting fact is that only 0.1% of the Euro populations have been diagnosed with Covid. Say it's actually 10 times that figure to account for unrealised contagion. Thats 1%. That means there are still 99% of population still at risk! If we dont kill this virus off completely, which seems highly unlikely or possible, it will not be over for a very long time. New nightingale hospitals still being built across the country suggest awful months ahead.

[wba1] 11/4/2020 10:10

Aviva have not had a halfway competent CEO since Richard Harvey - and he was complicit for failing to secure an adequate successor. Part of the problem is that Aviva, over the years,have preferred to select their CEO by a process of local infighting amongst inadequate Aviva staff rather than looking for the best talent outside Aviva. The only exception was Mark Wilson, in the wake of the Moss debacle, who was the best of a poor bunch since Harvey. And Aviva have made it worse by driving away what little talent they had, such as McIntyre. Just look at the farces;

Moss emerged from a battle with Patrick Snowball. No one would have rated either as adequate, but even Moss could not lose against a man known variously as 'Tankie' (both for his military background and style) or 'Duke' (because shouting is the answer. You just shout at them!).

Tulloch triumphed over Andy Briggs, and then lost Briggs (who at least understood the more important part of the business). Frankly, neither should have got the top job, but keeping Briggs was more important than keeping Tulloch.

And, finally, Adrian Montague should go. If there is one thing a Chairman should be doing it is to ensure the best CEO and manage succession at the top table. He has failed. There are good external candidates out there, whether from the insurance industry (such as Jon Dye of Allianz) or the wider financial services sector.

[igoe104] 11/4/2020 09:37

This tells a sad story for AV.


In the last 10 years, and with investors turning to stock market investments as bank deposit rates stayed ultra-low, Prudential (LSE:PRU) and Legal & General shares have risen by 79% and 123% respectively - Aviva shares have fallen by 33%.

[uppompeii] 11/4/2020 07:59

Ah, phew I thought lockdown had got to you!

[salver2] 10/4/2020 22:22

No I didn’t make it clear-I meant even factoring an aviva management incompetence discount 1 can’t see why lgen are worth more!

[salver2] 10/4/2020 22:22

No I didn’t make it clear-I meant even factoring an aviva management incompetence discount 1 can’t see why lgen are worth more!

[uppompeii] 10/4/2020 22:06

Are you saying L&G management are more incompetent than Aviva?I find that hard to believe.

[eeza] 10/4/2020 21:01

Tulloch is the proof of the 'Peter' principle.

[salver2] 10/4/2020 20:43

Can anyone explain how legal and general have a larger market cap than aviva even allowing for consistent management incompetence?

[spcecks] 10/4/2020 18:27

I'm sure the share price will rerate that's why I've bought Aviva.

[essentialinvestor] 10/4/2020 17:38

None of us know the future, however every year bear market I've known had
a bear market rally.

[spud] 10/4/2020 17:33

Overshot to the downside a fair bit, hence the correction imo. spud

[whatsup32] 10/4/2020 16:34

smurfy

My thoughts too