Prudential - snaffling a few shares a suitable compromise? Chris Bailey writes...

Amber Rudd’s pal Simon Hume Kendall, the SFO, arrests, London Oil & Gas administration – ouzo time at ShareProphets. Read HERE

There are always many different shares to write about but I am surprised that I haven't troubled these pages with my thoughts on the Prudential (PRU).  As a self-confessed investment geek typically focused on longer-term themes and trends, there are few corporate names in the FTSE-100 as well set up as the Prudential with its growing exposure to the burgeoning Asian insurance market, a region where the last ten year renewal premium compound growth rate for the company has been a cool 18% and profits have grown even faster. No surprises to see this as regions that are growing, urbanising and becoming wealthier demand more insurance.  And the Pru has a very good position across countries such as Hong Kong, Malaysia, Indonesia, India and (more recently) China.  It has also not been shy in building exposure in Africa too.  Mix this in with a lengthy participation in the UK and US markets and in last week's update the company said it had 26 million customers, over £650 billion of funds under management and (even more amazingly) potential access to 4.2 billion of the world's population...

Bluejay Mining - Placing being sounded out - City source. Read HERE

Insurance is though an opaque sector but the good news for the Pru is that cash flows tend to be back-end loaded i.e. much of the customer acquisition and general cost and related tends to be in the earlier part of an insurance relationship and certainly my studies of the space have suggested some correlation between writing quality business one year and seeing boosted cash flow generation capabilities a few years later. Insurance names often refer to 'surplus' and it is fascinating to see in the company disclosures that the longer-term growth in free surplus, new written premiums and operating profit are all congregating around the same proportional levels.

From Nigel Somerville, the Deputy Sheriff of AIM: Woodford dog Netscientific clarifies on PDS, but is it telling the whole truth? Er....

Now you can do quite a lot with the £4 billion odd of surplus the company generated in 2018 but I like that the Prudential is not just sitting still and counting the cash. The more I look at business, the more I realise that the best corporate names keep the internal energy quotient high. In the Pru's case it is forcing through a regional and operational split.  Last year the demerger of the fund management arm M&G Prudential was announced - as well as the proposed sale of the UK book of business - to allow the continuing Prudential share to be focused on the cash generative US market and the growth markets of Asia and Africa.  This is progressing to plan and as with many spin-offs and related may induce opportunities to create value as global investors start to respect the sum-of-the-parts a bit more.

Read HERE: Bonmarche – update includes “sales since Christmas had been slightly above the level required” & “bank facility is expected to be sufficient” BUT…

Given a choice here and now, I would much rather have the continuing Pru business which accounts even today for getting on for three-quarters of the surplus generation and in a few years time will be in an even better position.  However a little bit of geek maths using the Pru's current market cap of £42 billion as a base, suggests to me that the M&G spin-off should be worth £12 billion+ (2% of AUM) and as a quarter of the business, the overall group should have a market cap more like £50 billion. I can handle a 20% rise in the share price assuming a fair global wind (and I admit that is an assumption) which would suggest a move back to the 19 quid odd levels of not so long ago.  Simply put - with a share like the Prudential (which also has a justifiable dividend yield of 3%) snaffling a few now and at each new pound below the current share price (£15 something a share, £14 something a share) is a suitable compromise between opportunity and the short-term perception vagaries towards the insurance space. Buy.

Verseon Placing : Neil Woodford spunks $10m investor cash (again) at wrong price – all that is rotten in his failing empire. Tom Winnifrith, The Sheriff of AIM, writes HERE

Filed under: Prudential, Simon Hume Kendall, London Oil & Gas, Bluejay Mining, Netscientific, Verseon, Woodford

Atalaya Mining remains a buy after recent updates says Gary Newman

04/18/2019

A couple of ShareProphets share tips of the year updates

04/17/2019

Lessons from Plus500 and time to sell more Purplebricks. From Lucian Miers...

04/16/2019

Polymetal - all that glistens can be gold says Chris Bailey

04/15/2019

Central Asia Metals produces another good set of results and remains a buy says Gary Newman

04/12/2019

Barclays - a low sentiment today to a mid-range sentiment tomorrow play suggests Chris Bailey

04/11/2019

Sosandar - are the shares expensive or cheap after trading update? Nigel Somerville reviews...

04/10/2019

Quilter - a buy if you are a bull on the UK market says Chris Bailey

04/09/2019

Coro Energy - enough potential reward from here for a speculative investment considers Gary Newman

04/08/2019

Sosandar slides again back towards IPO price - time to buy back in? Tom Winnifrith reviews...

04/05/2019

Tern - placing at just 8.5p and an excuse that just does not wash says Nigel Somerville

04/04/2019

Versarien and its shocking new American Appointment. A sell from Lucian Miers

04/03/2019

easyJet slides again but time to pull back on the share purchasing throttle?

04/02/2019

A German Teutonic train ratio tells you that FirstGroup remains cheap suggests Chris Bailey

04/01/2019

Petra Diamonds could add some sparkle to your portfolio suggests Gary Newman

03/29/2019

Accesso - still a sell suggests Steve Moore

03/28/2019

Union Jack Oil - funding at a not great price... but look at the potential of the projects it is for

03/27/2019

If Royal Dutch Shell is going to be a utility giant it has got to buy big says Chris Bailey

03/26/2019

IQE - a good opportunity for bears with patience says Lucian Miers

03/25/2019

Next - if you want an annuity large cap core non-food retailer...

03/22/2019

Argo Blockchain - now a buy?

03/21/2019

Wood Group - chill out despite fall on results?

03/20/2019

Prudential - snaffling a few shares a suitable compromise? Chris Bailey writes...

03/19/2019

Anglo Asian Mining - long term buy and hold says Gary Newman

03/18/2019

Dignity: still worrying about competition in death warns Chris Bailey

03/15/2019

Concepta - signs up with Boots: Game ON. From HotStockRockets

03/14/2019

Further short term dips in Avesoro Resources will offer a good buying opportunity says Gary Newman

03/13/2019

Telit Communications - patience will reward those who are short at these levels says Lucian Miers

03/12/2019

Is it worth taking a gamble on the Guyana drill of Eco Atlantic? Gary Newman reviews...

03/11/2019

SDX Energy should perform well in 2019 and beyond says Gary Newman

03/08/2019

Synectics - results subdued, but confident of good progress from here

03/07/2019

A Turbulent Week at Tesla - sell before it is too late says Lucian Miers

03/06/2019

Abcam - review of a clever, innovative (but also fat cat pay) company by Chris Bailey

03/05/2019

Dividend Munchers Update by Nigel Somerville

03/04/2019

Centamin - the market has vastly over-reacted argues Gary Newman

03/01/2019

RNS potpourri - M&S and Ocado, GVC, ITV, Taylor Wimpey...and badboy Metro Bank from Chris Bailey

02/28/2019

Tesla - shorters patience will be rewarded in 2019 says Lucian Miers

02/27/2019

Reach4Entertainment - I am going to be honest ref. placing and acquisition. From Tom Winnifrith

02/25/2019

Purplebricks - catastrophic warning: target price 0p says Tom Winnifrith

02/22/2019

Lloyds - you cannot eat relative performance... but still bet on the black horse says Chris Bailey

02/21/2019

Yourgene - debt cleared; this is an amazing deal (plus comment on Hardman) from Tom Winnifrith

02/20/2019

Whitbread has a plan and Restaurant Group patently does not says Chris Bailey

02/15/2019

Thoughts on The US Market Juggernaut - and Tesla & IQE - from Lucian Miers

02/14/2019

Ariana Resources - Nigel Somerville updates on buy tip for 2019

02/13/2019

Is the Petrofac share price collapse a good buying or trading opportunity? Gary Newman reviews...

02/12/2019

Red Rock Resources – updates on Congo progress, Buy to almost double says Tom Winnifrith

02/11/2019

Thomas Cook - not buying its holidays but still liking its shares says Chris Bailey

02/08/2019

Union Jack Oil - various potential share price catalysts by HotStockRockets

02/07/2019

Centrica - good total return value? Chris Bailey reviews

02/06/2019

Tesla Q4 earnings call - One More Thing. From Lucian Miers

02/05/2019

Reach4Entertainment - 2018 significantly ahead & also expects 2019 ahead; Buy

02/04/2019

Is Rank really so dank? Chris Bailey reviews

02/01/2019

Dominos Pizza, Crest Nicholson, Royal Mail & PZ Cussons - any buys amongst them?

01/31/2019

IQE - sell the rally says Lucian Miers

01/30/2019

Is Tesco talking sense? Chris Bailey reviews

01/29/2019

Bluebird Merchant Ventures - rapid progress to positive cash flow?

01/28/2019

Obtala - Long Term Incentive Plan announcement... but no need for shareholder anger here

01/25/2019

I told you Metro Bank was dodgy...and not to underestimate Chinese chavs re. Burberry

01/24/2019

KAZ Minerals has the potential to become a copper mining giant in the future considers Gary Newman

01/23/2019

Character Group - reassuring AGM trading update, a speculative buy?

01/22/2019

Update on Flybe - Short Term Lifeline for the Retail Punter from Lucian Miers

01/21/2019

Obtala - quarterly update, now supercharging development. From HotStockRockets

01/18/2019

Headlam - time to buy? Chris Bailey considers...

01/17/2019

Telit - auto sale on track, but trading statement is a load of cobblers. Sell says Tom Winnifrith

01/16/2019

Shoe Zone - a value proposition suited to the challenging consumer environment?

01/15/2019

Flybe put out of its misery for 1p. Next up for near wipeout is Interserve says Lucian Miers

01/14/2019

Sosander - Q3 trading statement update from Nigel Somerville

01/11/2019

Union Jack Oil - Biscathorpe-2 well spud, let the excitement commence…

01/10/2019

Christmas trading update time - Morrisons, Greene King or Joules a buy?

01/09/2019

Bowleven - time for a small drop of Ouzo as 15p special dividend is announced says Nigel Somerville

01/08/2019

KEFI Minerals - shares slightly lower on Tulu Kapi project update, BUT...

01/07/2019

Next - no profits growth... but that is fine argues Chris Bailey

01/04/2019

Five slam-dunk shares to sell for 2019 by Nigel Somerville

01/03/2019

A share tip of the year for 2019 from Tom Winnifrith

01/02/2019

Rockhopper Exploration - a long term buy at the current price?

01/01/2019

Highland Gold is well worth considering says Gary Newman

12/31/2018

A share tip of the year for 2019 from Gary Newman of ShareProphets

12/28/2018

Investment is all about passion...not passion investments says Chris Bailey

12/27/2018

Professor Malcolm Stacey with his World Famous Christmas Lecture...

12/24/2018

What looks interesting in the FTSE 100? Chris Bailey reviews...

12/21/2018

Optibiotix - board strengthened, still a buy?

12/20/2018

Boohoo vs ASOS - could one unravel very soon indeed?

12/19/2018

Retail & SSE plc omnishambles, but some value in the sectors? Chris Bailey reviews...

12/18/2018

Lessons from AA plc. Lucian Miers writes...

12/17/2018

PZ Cussons - time for a research trip to Nigeria? Chris Bailey writes...

12/14/2018

Wood Group, Superdry, Dixons Carphone & DP Poland - any buys from a busy RNS day?

12/13/2018

KEFI Minerals - positive regulatory consent news in the coming weeks?

12/12/2018

Thoughts on Thomas Cook - stay away, Short Flybe instead says Lucian Miers

12/11/2018

Petropavlovsk - POX Hub processing milestone, Buy

12/10/2018

Yourgene - Premaitha as was - interim numbers not impressive, but still a strong buy?

12/07/2018

Numis statement shows why the finnCap IPO is such a stinker says Tom Winnifrith

12/06/2018

Synectics - remains a recovery buy say Tom Winnifrith & Steve Moore

12/04/2018

Blue Prism Group - argues it is pleased in trading update, but shares still a sell?

11/29/2018

Greencore & Ibstock - a tale of two disposals from Chris Bailey

11/28/2018

Premier Oil could see a swift rise when oil bounces considers Gary Newman

11/27/2018

Optibiotix - Greek deal news via Adam Reynolds keyboard, but better to come. Buy.

11/26/2018

Updated thoughts on Tesla - stay short says Lucian Miers

11/23/2018

Three larger cap buy ideas from Chris Bailey

11/22/2018

AO World - interims argue remains confident, but can high growth rating really be justified?

11/21/2018

Dividend stocks & what to make of the Brexit omnishambles from Nigel Somerville

11/20/2018

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