Just Share Discussion Threads

[bolador] 20/8/2018 23:10

Finished above the low with over ten million shares traded ! Somebodies took the stock and today was not the panic it could of been. I think we may have seen the low.

[spectoacc] 20/8/2018 15:42

I'd like to read that Credit Suisse note, and 90p price target.

[topvest] 20/8/2018 15:10

Its ridiculously cheap in my view, but I suppose I would say that! They don't need an equity raise so I am still inclined to believe that this will bounce back. Great Buy versus asset value.

[boystown] 20/8/2018 15:03

Bought a few here at 86p - it's beginning to look an interesting risk-reward play depending on what the PRA does. But if they had to recapitalise, surely that's not insurmountable if the business model is sound enough - which it has proved to be so far.

P/E looking back over the last two years is now 4.3, yield 4.6% and nearly at a 50% discount to NTAV (mainly liquid assets).

[edwardt] 20/8/2018 08:46

credit suisse saying that 20pts could be taken off solvency ratio. hence likely to either use reinsurance for guarantees on life time mortgages to ensure can carry on doing annuity business. target price slashed to 90p! i am holding tight and waiting for the storm to blow over!

[edwardt] 20/8/2018 08:36

i suspect there is a growing short count as they prey on the uncertainty. all thanks to the regulator

[spectoacc] 20/8/2018 08:18

Guessing some press on it, tho saw nothing in Sunday Times.

[scrapheap] 20/8/2018 08:17

What's happened now!!!

Or about to....

[eumaeus] 19/8/2018 14:58

Question for this forum. ERMs are high yielding products. Even when an appropriate NNEG spread has been taken out, they still offer good yields. The question is how shareholders will benefit from the higher returns. Any ideas?

[18bt] 17/8/2018 11:23

Seems to have axquired a DP Pensions consultancy hxxps://corinthianbenefits.co.uk/ according to Money Marketing

[topvest] 16/8/2018 15:48

What does seem odd here is that this is getting punished so much. Lets compare with a highly rated specialist BTL mortgage lender for example.

They disclose LTV by % banding and have nearly £3bn or so in the 70-80% band and quite a big number in the 80-90% band. Surely, a 20% housing slump would hit all these lenders at least as much, if not more?

I think it is a very good suggestion for companies to disclose the valuations per LTV band as say Charter Court Financial Services Group do. Maybe Just Group should do so as well.

[jane deer] 15/8/2018 14:51

18BT. I am not sure if the PRA would be concerned if the holders of LTM assets are off-shore. In fact, if (and that is the key if) UK LTMs have been underpriced, then the UK borrowers are the winnners and the asset holders are the losers. If these assets are held by UK insureres to back UK annuities and risk the financial health of the insurer, then the PRA is correct to see a problem.

[lovat scout] 15/8/2018 13:54

With this share price reaction the board must be considering if LTM is a business line worth pursuing.

[scrapheap] 15/8/2018 12:58

something positive even if it is the express...

[18bt] 15/8/2018 07:47

Lovat I don't think the regulator wants to kill off LTM and a couple of the players apparently are under SII "Standard Formula" and at least one is non-UK and therefore outside the clutches of the PRA. If they create uneconomic assumptions, the business just moves outside UK regulation for others to take advantage. One thing the PRA hasnn't addressed is the potentially massive gap that opens up between life assurance and banking regulation. I know that conventional mortgages don't have a NNEG, but imagine what happens to banks' mortgage books if you assume that house prices decline over a 20 year period. So the PRA needs to be very careful.

[bolador] 14/8/2018 18:48

Eastbourne 1982,

Thanks for your comment but I was really thinking of the 40 year run in house prices UK.

[lovat scout] 14/8/2018 18:17

Hopefully the government and regulators don’t want to kill off the LTM business as it may well be a key component of solving the forthcoming lack of savings and pension crisis. If a big stick is waved, JUST will have to raise any necessary funds and reprice or close to new business then move on.

All should become clear end of September. Does anyone have a view on the nuclear outcome impact on embedded value?

All speculation but £160m has been mentioned before - if that had to an equity raise at say 80p I think that knocks embedded NAV to 197p. Is there a further knock by the actuary?

[scrapheap] 14/8/2018 16:34

As I've floated before, if the LTM issue isn't going to be too bad, I expect Just to be taken out by a rival who also has LTM exposure and thinks this is a great oppo to take out a rival - who also have Long Term INAs (so not Aviva as would be a monopoly) and enhanced annuity capability and/or DB buy-out expertise.

However the downside, if said rivals think LTM is going to massively hit Just, then why do anything other than wait on the sidelines for further damage.

ie I don't expect the price to be around £1 at year end but it could be a long way up or down from here so doesn't help much!

[topvest] 14/8/2018 14:47

Can see this company falling to a bid from Legal & General / Aviva if this continues for too long. Its a bit of a bargain, and they would fail to defend a 150p take-out. That would be mightily attractive to another industry player in my view.

[eastbourne1982] 14/8/2018 12:49

bolador,

With regards to house prices having a huge run, I don't agree, strip out London and the south east and many places have only gone up circa 5 - 15% since 2008, hardly what I would call a boom.

As ever people are clouded by the London and south east market which is now under pressure.

[bolador] 14/8/2018 12:09

Anybody considering investing in JUST must be put off trying to understand the technicalities of the various products on offer by the company especially if they have read the most recent posts here.

On the face of it we have a company on a PE of under 6 an EEV value of 228pps and a very strong trading statement in July. The share price now looks to be one of those stock market anomalies that crop up from time to time time.
The company must be aware that the interest cycle is on the turn and from historically low levels. They must also be aware that the UK housing market has had a huge run that is unlikely to be repeated soon. Can they not adjust their terms to suit or are they stuck with unhappy contracts ?

As to house prices ever weaker sterling provides a partial safety net for this business.This perhaps complicates the relationship between option models and the real world.

Numis had Just a buy in July after the trading statement with a TP of 220p !

[lovat scout] 14/8/2018 07:58

Regulators have to be cautious, it’s their job after all, but surely lower LTVs for LTMs kills the issue off?

[scrapheap] 13/8/2018 17:30

Do they not just need to record what on their books is in LTV based on current market prices versus debt rolled up to-date and year on year report this and adjust reg capital y-o-y too if things get tighter?

Halifax for example have an auto current property value on mortgages for existing borrowers, if Just has something similar for their portfolio of properties, they also know the debt as it currently has accrued on each so the current LTV and buffer.

Add in the age of the borrowers on each property so their actuarial likely age to die / go in to care - or say simplicity of 90.

Then report to PRA on how much £ debt is sub 40%, 50%, 60%, 70% LTV and then per say <60, 60-70, 70-80, 80-90 age bands - bobs your uncle.

I can see the interest in the option pricing debate but it's missing out that clients aren't wanting to use this option - normally they are planning to leave some money still out of their estate and typically haven't maxed out what they could borrow (as allowed by the insurer's own calculations of age/value)- that's safer for me too that way!

As an IFA, whilst the NNEG is definitely reassuring to my clients, I can't think of ANY where the amount they have borrowed is expected to wipe out the equity entirely and that's based on assuming no price rise at all before they die / go in to care....

If there's regular MI of how the book LTV is versus automated current property pricing and then build in a 'distress' assumption of a fall of 'x' from here too. Adjust reg cap up and down as a result as needed.