Resolution Share Discussion Threads

[samwn1] 10/12/2012 17:47

From ADVFN Newsbrief :

Prime Markets has labelled insurance giant Resolution as a 'buy', following Monday's announcement that it is nearing the final stretch of its simplified governance structure.

The broker said that, having touched 190p in late June, Resolution is looking like an "increasingly solid recovery play" within the insurance sector.

[scburbs] 10/12/2012 12:14

"Resolution has reached a final agreement to simplify the group, and we expect the announcement to be well received. The service agreement between Resolution
Limited (RSL) and the Clive Cowdery controlled management company, ROL, will
end eight months early and will save RSL around £10m annually from 2014. The
company has also decided not to buy out the value share, which should be well
received as there was concern that the company would overpay. The strategy and
focus on cash generation remains the same, and with an attractive valuation of 0.6x book value and a dividend yield of 9%, we reiterate our Overweight rating"

[Barclays commentary from FT Alphaville]



Also some comments from RBC on the pension changes.

"Operationally well placed. As the UK's 2nd largest corporate pensions
writer, Friends Life Group is well placed to benefit from the asset shifts we
expect in the UK (government to private sector, defined benefit to defined
contribution, bundled to unbundled) and the positive regulatory changes
(auto-enrolment, RDR). We note the shares of other well placed UK life
companies have been among the best performing European life insurers year
to date."

[scburbs] 10/12/2012 08:01

Good to see that common sense prevailed on the value share which is to be left in place. Whilst the ultimate price paid may be higher (if the share price performs well), paying cash for failure should be avoided.

Not too clear about the cost saving remarks as comparing the settlement payment with contractual payments is not like for like. I suspect these do not include the loss being made on the lease or the fact that RSL has to pay the transferring employees. They also haven't stated any cost savings going forward, which would be very useful to know.

[sawadee3] 05/12/2012 08:20

Happy days chaps :-))

[aleman] 04/12/2012 13:33

FTSE 350 insurers index

[aleman] 03/12/2012 14:40

I'm not a chartist but it looks to have made it through a few minor resistances of late and looks set to step up modestly from here. Sharp falls in PIIGS bond yields recently seems to be helping. Where should insurers prices be if EU markets normalise?

[aleman] 29/11/2012 14:08

Creeping up a bit on the quiet. Are these starting to recover some of the underformance against other insurers this year? THe moving averages are looking interesting at the moment.

[samwn1] 28/11/2012 19:57

From tonight's ASVFN Bulletin :

Shares in insurance giant Resolution were in the red on Wednesday morning after UBS cut its rating on the stock from 'buy' to 'neutral', citing a 'less compelling' valuation.

The broker said: "Resolution's disappointing nine-month trading, EV write-downs, UK restructuring charges, and recent share-price performance all point to a downgrade to 'neutral'.

[skinny] 16/11/2012 07:18

Without reading the broker note - it sounds like they are advocating reducing your holding and either maintaining the TP at, or reducing it to, 250p

[samwn1] 15/11/2012 23:39

The following is copied from today's ADVFN Bulletin :

Nomura has maintained its 'reduce' rating and 250p target for life insurer Resolution after the group's third-quarter statement disappointed, saying that its valuation and prospects are still 'unattractive'.

"Although Resolution has made some progress in improving its VNB, we still regard the UK Life Project as structurally challenged by both the Retail Distribution Review (RDR) and the difficulty of achieving cost synergies in UK life back-book integration."


Is the 250 target a typo error?

[skinny] 15/11/2012 07:08

Highlights

· Continuation of the strategy of value maximisation and cash generation
· Successful refinancing of the deferred consideration notes further de-risking cash flow to shareholders
· Final regulatory approval being sought for the intended sale of AmLife
· Strong operational progress continues in the UK and clear direction identified from strategic review of International

[skinny] 06/11/2012 14:46

Thanks for the link scburbs.

[scburbs] 06/11/2012 11:59

On Merrill buy list per Alphaville.

"Resolution shares are down 10% YTD against a sub-sector up nearly 30%. The
valuation case is now compelling across a range of measures, in our view. The
shares are trading on 7.5x our 2014E IFRS EPS, a 20% discount to peers. The
IFRS and EV book value multiples are 0.6x and 0.5x respectively, well below the
peer group at 1.6x and 1.0x. Most interestingly, the 9.5% dividend yield is double the peer group average.

...

Our 264p PO plus dividend income suggests a 12-month total return potential of nearly 30%. Consequently, we are upgrading our recommendation from Neutral to Buy."

[skinny] 06/11/2012 09:28

A close above 230p / 200ma would be positive.

[aleman] 06/11/2012 09:06

Highest for a few months (edit - if it holds on). Is it finally starting to close the gap with other insurers? If it had kept up this year, it would be just over £3.

[skyship] 05/11/2012 15:14

Yes, annoying that as you may have been filled at c10:25 on the Monday morning.

Difficult times to make trading turns, but RSL certainly see-sawing well if you can time it; though that falling 200day MA may well limit ambitions in the short-term.

[gary1966] 04/11/2012 00:40

Skyship,

Thanks for flagging up Fingers response to my request. Been in Snowdonia for the last week without mobile, TV or internet connection and so only catching up on boards tonight. Unfortunately I moved my buy order down to 200.5p from 205p before I left after the weak US markets on the Friday. With hindsight this was a bad move as my order looks as though it would have got filled on the Monday and been well in profit by now.

Gary

[skinny] 01/11/2012 10:10

RSL on one of its run ashores!

[sawadee3] 31/10/2012 08:52

Up we jolly well go chaps :-)

[sawadee3] 30/10/2012 11:17

Well it seems the market "dared not" take it down much after all.

In profit and happy days! :-)

[skyship] 28/10/2012 10:50

GARY - Fingers has answered yr chart request on Post No.2548. No clear evidence one way or another - though looks to be strong underlying support; just as there appears to be strong resistance!

[sawadee3] 26/10/2012 08:55

Lets see how far they dare take it down, ready to buy more for sure :-)

[sawadee3] 26/10/2012 08:08

Back in again sub 210 ready to make on the bounce :-)