Aviva Share Discussion Threads

[cjac39] 10/5/2020 08:37

i do think m&g is interesting. its a junior version of avivas uk life and asset mgmt biz and i would be surprised if it exists as an independent company for too long. its dominated by the value of annuity book + wp fund which i reckon less debt is about the m cap so u get a decent sized asset mgr thrown in for free. once dust settles on reassure acqn it wouldnt surprise me if phnx has a tilt at m and g if they can find a home for the asset manager.

[dr biotech] 10/5/2020 08:14

Just to be clear WhatsUp,I’m not saying your making things up or ramping and the Times is more credible than other sources. it’s just for the board to replace MT they’d have to admit their error and I’ve yet to see any signs of them doing that. As WBA says they seem to have fallen inline with MTs ideas, rather than pushed for anything more radical.

M&G were split from prudential in 2017. It’s perhaps what AV need to do with their investment arm.

[neophytos] 09/5/2020 22:10

cjac39 - I was reading your previous post that in addition to Aviva, you also like M&G so I went to check them out. Seems like they founded in 2017 and were only trading late last year. Can you tell me anything about them? Do you see a lot of upside / growth as a longer-term co. to invest in? I notice they are c50% down to their starting point (due to current market of course).
Thanks,
neophytos.

[whatsup32] 09/5/2020 17:16

Those anyone know how a hard Brexit will effect Aviva’s ability to do business in EU nations.

[wba1] 09/5/2020 16:42

I fear I agree with Dr Biotech on Tulloch. Whilst I would love to see him replaced I just do not see that happening without an outside catalyst such as an investor revolt or a serious attack from activists. Surely if the current lot of jobsworths on the board were going to act it would have been in the wake of the board row last year about splitting the company, when Tulloch got his way not to do so over the majority view on the board. But I live in hope that their hands will be forced sooner rather than later.

[whatsup32] 09/5/2020 16:03

Doc.

3rd May Sunday Times , Business section article by Oliver Shah. I think that’s where I got 2.5X and Tullough getting canned

[whatsup32] 09/5/2020 15:58

My understanding was replacement of Maurice was in the pipeline and BOD was actively looking. I think I read last weekend ??? He would become the shortest serving CEO .

2.5X break up value was not mine and again I think it was mentioned in the same paper.

I’m also up to my neck with Aviva shares but feel from these lows upside is more then downside. I don’t expect a bid either

[dr biotech] 09/5/2020 15:42

Can’t agree with all of those.

“Board likely to replace Tullough”. That would be the same board that took forever to make him CEO? Don’t get me wrong I said at the time I wanted an outsider and I’ve seen nothing yet to make me change my mind, but I’d suggest we have home for a couple more years yet

Break up value? I don’t want to diss those on here that came to these values (and I openly admit their knowledge is better than mine) but that’s been said about AV for ages and no one has come looking.

Not sure that we are really moving forward with any clarity on covid or what the final outcome will be. Smaller economy, less people buying insurance or investments. Don’t get me wrong I’m waist deep here, but I expect a bumpy ride over the next 2 years

[whatsup32] 09/5/2020 13:40

Post Virus , think we all agree things won’t return to normal but which sectors will be better then others.

Aviation ......Terrible for next few years at the least
Hospitality..Hotels , Restaurants, Bars.....future looks bad
Also Oil sector , Cars, Transportation, Property’s all looking bad.

Strange as it may seem I think Insurance sector ( properties, cars )will do OK given it’s mandatory to have insurance. I don’t know how life insurance, business insurance will do ,I also think Travel insurance will drop due to reduced travel

I’m of course hopeful there will be a takeover but don’t expect one. I also feel Aviva is a relatively safe bet given its sector and its likely to continue and survive while others will not only suffer but may even go under

[whatsup32] 09/5/2020 12:55

Upside to share price is more likely then down side given

SP is about half where it was this year
Break up value is 2.5x
Board likely to kick out Maurice and replace him with someone better
Clarity on Covis19 claims coming through in the coming weeks
Businesses returning to work
Virus not spreading any further infact reducing
Broader market going up
Possible takeover activity
Guidance on paying dividend

[eurofox] 09/5/2020 12:45

This share is beginning to form a flag and its going to be really interesting to see which way the share price breaks out from it

[wba1] 09/5/2020 11:32

I take cjac's points about mix of businesses and the alternative of activist investors. I have some problems looking much beyond the big 3 of Allianz, Axa and Zurich as potential acquirers (although I can certainly see others interested in parts, such as Canada). Of those Axa looks the most likely (if still unlikely). Allianz in the UK are still digesting the LV deal and have avoided UK life for some years. Zurich would be more inclined to look to Europe with Mario Greco in charge. But Axa have always been unpredictable and do have operations in most of the Aviva markets.

But activists look like the best hope, and given the 2019 noises you would think they would have their sights set given the awful board performance this year. But if they are preparing to act they are being quiet about it.

[chambersiain] 08/5/2020 22:27

I sold in 2014 for a mats knacker off £6, think it was £5.84

[lrj] 08/5/2020 22:06

chambersiain

Aviva, has never reached £6.00 between your dates, or to date.

[dbadvn] 08/5/2020 21:29

Cjac39,

I hope you are correct-my money is on it!

My view is that the market certainly “knows” the fair value of Aviva and most of ,if not all the discount comes from the issues that you and wb have exposed so expertly.

The sentiment /sector undervaluation is an additional factor overlying the whole thing. If sentiment changed tomorrow Aviva would still underperform and continue to do so until the factors you have highlighted get sorted out.

One way or the other I believe that the downside is limited and there is good long term upside from here , so as you say -I’ve tucked them away .. and I’ll buy more if they fall further.

Thanks for your insights.

[cjac39] 08/5/2020 21:02

Dbadvn

Whilst on a simplistic level that’s right, On a fundamental value you couldnt be more wrong. Have a look at some of the best capital allocators who from time to time underperform the market eg buffet, et al and you can see for decently long periods good companies and good investors suffer. This isn’t them wrong per se it’s valuations and markets disagreeing with fair value. I suspect that’s where we are now with U.K. financials : incorrectly the insurers have been traded down with the market but most people don’t understand them so for those that do this is a generational once in a decade opportunity to buy them and tuck them away at 10%+ div yield which is my view

[chambersiain] 08/5/2020 20:48

Buy, keep on buying and hold, the challenge you face in 18 months if whether to sell at £5 or risk waiting for £6. I purchased at £1.80 in 2009 sold at £6 couple of years later. Aviva is like a bipolar kid high on a sugar rush or lack of one, when this kid eats candy it's like dropping a minto into a glass of cola - explosive, when the rocket ship takes off boy it's gonna fly

[dbadvn] 08/5/2020 20:44

Not to disagree with the insurance experts on here but on a fundamental level the company is only worth what the market will pay . As a package which includes the poor management, the somnolent board and the undervalued business assets it seems to be worth about £2 or so.

Until something changes , that’s it.

[cjac39] 08/5/2020 20:27

Maybe. These things take time and big cos move slowly. As before I think av has such a random collection of businesses it will put off a natural buyer so base case you’ve go to deal with what you own. However if someone like Elliot got hold of them it could get interesting as the undervaluation is ridiculous

[whatsup32] 08/5/2020 20:07

If there was going to be an offer for Aviva I would have thought they would have done so by now while the company has been beaten down and we have a weak Board.

[cjac39] 08/5/2020 19:49

Chambers yes buy them. Who knows what will happen but as wba points out this isn’t that large an acqn for some of the globals like Allianz or Canada life. It’s the shareholders own fault if someone comes in and bids 20/30% over disturbed share price and they accept it. However I don’t think this is realistic with their curious mix of businesses.

[milliethedog] 08/5/2020 18:49

gekko......filtered here too

[chambersiain] 08/5/2020 18:12

CJAC when you say "take them out" do you mean acquire them? If that is the case it would have to be at an agreeable price for shareholders to approve. If we think it's assets are worth 2.5x then surely any prospective suitor who have to raise offer significantly?