Just Share Discussion Threads

[18bt] 11/4/2023 14:34

Good strength in the past 2 weeks. Feels like there is greater calm in 15 year interest rates.

[clive7878] 09/4/2023 21:17

The yield of Just - 2% now ? could catch up with others in the same section - of around 6% ? - if the results do hit target for a pe of 3.5. On the basis of dividend only the share price should be 30p, but then the prospective pe ratio would be a real bargain and quite silly.

If others in the same section are on a pe of 6, then that makes Just share price 154,
so the fact that the dividend in only a third of others may be irrelevant at this stage.

My previous target was 128p. Just share price is lower that others mainly because of past record has been dodgy looking at the 5 year record. So IF Just does prove itself then the share price should come somewhere closer to targets.

That's my view - rightly or wrongly - time will time.

[cjac39] 07/4/2023 20:42

1jat ill make it easy for you. what is the MA yield of Just vs all others. Let me know your thoughts on that.

[1jat] 05/4/2023 10:36

What is Jefferies case to raise the target price?
Not objecting if this draws in some new (even if speculative) interest.

They did get to 95 prior to the banking wobble…..the share price has recovered relatively well…so the upswing may continue, although I suspect another year and the 2023 FY results will be needed to gain a rerating.

[kilobyte2] 05/4/2023 10:16

Jefferies raises Just Group price target to 140 (120) pence - 'buy'

[clive7878] 05/4/2023 09:40

They cant appear to be break above the 90p range at present.
The stock should be at around 128p though, if the pe ration does achieve 3.5.

[1jat] 01/4/2023 20:16

Cjac…always good to hear well reasoned arguments for or against.
Just is a difficult one to understand and the market is wary of it….the large players seem to be talking up the bulk annuity opportunity…of course it is a 30year bet on longevity improvements and long term investment returns and nothing is certain….the just portfolio would probably be better off as part of a larger book but i would doubt much more than 120p would be paid, even in an all share deal.
In the meantime Just needs to up its cash generation and lift the dividend into the 8-10% yield range to be comparable with PHNX/LGEN/MNG which I agree are more stable lower risk investments at this time.

[cjac39] 29/3/2023 16:01

charlie - sorry missed your qn - i dont login here much. in actual fact ive been looking into this point and im not sure its right anymore re models. i had thought they had some dispensation when the evt rules came in, ie a glide path, but i think thats equalised now. where i do still think they have an issue re someone taking them over is placal and its enormous tmtp. ie if you try and partvii this its likely or at least potentially the case that the tmtp doesnt transfer. this problem has reduced as the evt rules and fwds being swaps less deferment this has caused the nneg to decline a lot hence the decline in tmtp aside from lower risk margin.

nonetheless it remains the case in my view this is risky compared to others. the s2 bv if you adjust ownfunds for net of tmtp and risk margin which are neither real assets or liabs and knock off subdebt is a bit over 1bln. is it really the case the nb franchise and the tiny amounts of vif are worth a lot over this bv compared to others?

moreover the gains in s2 surplus could be very transitory with now unhedged rates and the nneg reduction is also a source of interest risk.

they are writing nb on a tiny amount of spare capital, they dont have capital to warehouse illiquids to price into bulks, and the back book doesnt throw off much cash.

doesnt matter how you dress it up its either super high risk or needs running off in my opinion, or at least a deeper pocketed suitor to take it private.

people seem to disagree with what ive said before - good luck to you all - on a relative basis its mad to invest in this vs mng or av but time will tell.

[clive7878] 29/3/2023 15:25

ammons - true.
If we see proof of a sustained recovery,
the share price could very well break out big time,
but we need to see this first.

[ammons] 29/3/2023 15:08

PI's like LGEN, PHNX etc because they have a decent divi while they wait for recovery. JUST does not.

[clive7878] 29/3/2023 15:02

Boystown / salver2 - my thoughts entirely.
on a prospective pe ratio of 3.5 the stock is cheap.
The write up in the I.C. was very glowing.
It should be on many people's radar / watch list by now.
i believe the price should be nearer to 128, as the sector average is around a pe of 6.
However as salver2 pointed out - the results have had a rocky ride, and faith is a lot to do with the current share price. Brokers future share price range from 90p to 130p.
I personally am a holder and am tempted to buy more, as has been said,
it could be the time to buy now, rather than looking back to say - I wish I did.

But if one takes SLP- which I nearly went into at 109p - they are on a very low pe too,
but are now 88p, but there is very little substance with SLP.share price.

[salver2] 28/3/2023 17:41

You’re not alone - I don’t really - I think it’s cheap but they have disappointed in the past and as with most of the UK stock market under owned and unloved -and then when it’s taken over everyone will moan about how undervalued it is

[boystown] 28/3/2023 17:08

Can anyone explain to me why this is so cheap? I admit I don't understand enough about what it does, and I also understand the risks of having enormous assets and liabilities (as with banks) but whenever I look at the balance sheet, I can never understand why it's not valued closer to £2bn, i.e. well over twice where it is now.

[clive7878] 14/3/2023 11:37

Strange that with a forward pe of 3.5 - which implies that the stock is lowly priced that the share price now is waning. I would have thought that the price should be around 128p, but maybe the market is waiting for confirmation of the business prospects before the re-rating does take place.

[clive7878] 10/3/2023 21:14

RBC forecasts eps of 25.3p, and a forward pe of 3.5.
Hope that the share price could easily reach 128.

[1jat] 09/3/2023 09:42

The item I thought was interesting is that their £500m deal in 2023 is retained wholly on their balance sheet without the previous partner reinsurance approach.

Of course they can add reinsurance in the future, but it is a sign of increasing financial strength.

I would like to think the company has turned a corner and is now positioned for profitable growth…but whenever I have thought that in the last decade something comes along to set them back…..

[riverman77] 08/3/2023 16:36

Up 25% from the lows on Friday. I know cjac is clearly an expert and has worked in insurance, but suspect he doesn't know as much as he likes to think about Just - his comments felt a little half-baked. I went through the numbers and all looks good to me.

[salver2] 08/3/2023 08:52

Yes that was very strange looked like some sort of manipulation - up about 30 percent since the low point a few days ago

[shauney2] 08/3/2023 08:47

Well down anyone who bought that strange dip down to 76p last week.

[charlie] 07/3/2023 13:39

Cjac what’s the nature of their lesser treatment in the internal model? Seems surprising, I would have guessed the opposite, lots of extra scrutiny for their NNEG risk (albeit now significantly reduced). My email is at insurancediscussions if the answer is too long for here.

[charlie] 07/3/2023 13:39

Slide 27 shows GIFL market share was their lowest ever in 2022. Looks like they have been genuinely selective on pricing.

[kalai1] 07/3/2023 13:34

Just Group Plc posted impressive FY22 results this morning. Underlying operating profit was up 19% to £249m. IFRS after tax loss was £232m (FY 21: loss £16m), but the loss was driven by losses on interest rate hedges to protect the Solvency II balance sheet of £510m. These hedges were removed as the solvency position strengthened over the course of the year. Retirement Income sales were up 17% to £3.1bn, the Group is also seeing strong momentum into 2023 including recording the largest DB transaction to date of £513m. A very favorable DB market backdrop and a £6bn pipeline support expectations of substantial DB sales growth in 2023. Valuation is very attractive with forward PE ratio at 3.7x ranked top out of 20 names in the Insurance Market. The balance sheet is also strong. Share price lacks longer-run momentum, but with valuation so attractive and the business solid, JUST looks to be a share to hold for the long run. BUY...

...from WealthOracle

[1jat] 07/3/2023 08:22

The story has been one of capital…..
Assisted by increased interest rates they have the strongest capital position for many years as measured by the SCR% of 199.
Disappointingly their organic capital generation fell, but they are presenting a positive story for the future.

There is no doubt that the DB derisking market will be substantial for the next decade. Although how profitable that will be remains to be seen.
Just is reliant on its reassurance to be able to write this business at volume but as risk sharing that may be a good thing for Just as a relatively smaller player in the market.

Now that much of the heavy lifting to repair the balance sheet it is time for the market to review its assessment of the business.

[18bt] 07/3/2023 07:55

I was looking at why the market consensus for income was apparently missed by quite a long way whilst Operating profit was on target or well beaten after reserve releases. This is the answer: "Adding the £259m DB partner premium to Just's shareholder funded DB sales led to total DB market volumes of £2,826m, up 46% on prior year".

[18bt] 07/3/2023 07:46

This is their current position on interest rate hedges:
During the year, we actively reduced the level of interest rate hedging as the capital position strengthened, with the sensitivity at year end 2022 now close to zero (c.£7m of IFRS profit for a 100 basis point increase in long term rates compared to £526m loss at year end 2021).