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For a company that made 3 1/2 million net profit and predicts to be back on track for a 18 million profit next year. I can’t understand the large drop off in share price. Talk about over done knee jerk reaction.
The company still is intending to pay a dividend.
Given the difficult trading conditions with Covid and inflation, I bet there are lots of companies in their position
Agree, d4 today so should see buyers move in so good springboard opportunity from here now imv
Hopefully we should see some movement in the next few days! It looks like we have hopefully found the bottom! Direct Line seems to be seeing some recovery and is near £2.00 and Admiral is holding well, so this should see some gains on Sabre! GLA
If you wipe out £48m of net profits (with growth factor of 1%) over the next
(uniformly-simplified, although transition from poor to better quality of policies
is rather skewed towards closer years and not that bad later on)
say 8 years
(due to today's portfolio exposure to pricing decisions under portfolio growth policy)
at 7% discount rate then loss of valuation from this lost cashflow differential is close to £300m.
{as we've seen recently}.
and either interest rate will remain high to fight inflation {monetary tightening}, or inflation will remain high with existing amount of monetary stimulus released - therefore this quality aspect of existing portfolio is in quite a poor state.
I mean sell-off by larger holder is materially contributing factor but I wouldn't expect recovery to be huge and outright.
@fre1 Exactly my thoughts
All the more reasons this fall is overdone and represents a very good opportunity
DLG and SBRE got hit by the same event with similar outcome on company finances, but very different market reaction
(SBRE : -50%, DLR: -20%), looks like scale and index inclusion does make difference.
They've been trying to expand under very challenging market conditions,
policy pricing highly sensitive/elastic due to tough competition
(brokers will switch to another provider just for 50p difference)
Claim from 1 year policy can kick in years latter.
Some of their policies cover not just for 1 year but for 3 and 6 years of cover where premium can't be changed.
Money collected from current covers are invested into low-return instruments (due to low BoE interest rate)
Therefore it's not short-term 1-year reduced-margin gap (nominal collected premiums, return on instruments those money invested to, nominal expected payout) - but much longer term implications they will have to suffer (although at generally decelerating rate as seen on their claim development triangles - pages 111/112 of 2021 report).
Taking these money (of lost future profits) from a cashflows generally yields current drop in valuation.
It's not like their pricing/risk team actuaries made a totally wrong call on case outcome distribution based on stats (and consequently pricing/premiums) but rather about macro-risks kicking in (actuaries are a bit more narrow-specialists, not macro-economists after all, plus competition vs expansion pressure by management pushed into premium undercutting, share of capital they have exposed to this risk is huge - again: see recently implemented growth/expansion policies).
Let's not forget what all other car-insurers will seek a ways to compensate this wide-level impact - therefore competition wise it will get worse.
After this big seller (K-A-R inv.) clears out their position to relocate money somewhere else (presumably with better return prospects) - there might be some signs of sp recovery (justified or not - time will tell).
As you can see they've been consistently and periodically reducing by 1 percent (and already almost dropped below mandatory reporting threshold).
All imo.
Just bought a load more at around 103p. Bargain basement prices. Imho GLA
It opened 5% up despite of DLG's RNS. Today's sp drop is understandable because of the Car insurance sector overall drop (-3.36% atm). Chunky buys are been pouring in since 2 hours ago and current Buy/Sell ratio is >over 2:1 .
SBRE is heavily oversold on the Weekly, Daily & Hourly tech chart and so I am expecting a technical bounce from here anytime soon.
Buys exceed sells, should see strong recovery d3 today
This is going to get pushed down to below 100p, fire off a few stop-losses. I was going to buy before but looks
Like going lower. Waiting and ready, a steal below 100p.
This would have been up today if it wasn't for Direct lines RNS!
I agree, MM's playing their usual tricks to shake out the weak and Stop Losses.
It shows how overdone Sabre was when Direct line are only down 13% on similar news when sabre lost nearly 50%. The share price should be corrected very soon! GLA
Well and truly oversold hence the reversal. Lets have a slow and steady climb back towards £1.50
I agree (almost!) - its not a Sabre problem, its an industry problem - Sabre is doing the right thing and its competitors have taken share at rates that will cause them pain. Just a matter of time for them to also raise rates. Look at some of the predictions from analysts like Ernst & Young who are reporting ratios of 111% plus this year and more next year for the UK motor insurance market - they dont make this stuff up. As Sabre say, they are well placed to take advantage of the market if rates rise - the only requirement is that rates rise!
Nothing, silly phone.
Hawthorn, they raised their prices, so we’re not that competitive, so made a loss. North that can’t be sorted out, they need to be competitive, not raise their prices 19 percent, when inflation is a lot lot lesser than that.
It may be a bargain but when was the last time Sabre ever had a loss ratio like this? It isn't what they do.
It is a big bad world out there in this sector and it seems that no-one know quite knows how much damage inflation is causing right across the board - wages, claims handling costs, hire cars, spare parts, replacement total loss cars and potentially a major one is the impact of inflation on the very large personal injury claims that already run into the millions. Add a small inflationary amount on those over many years can be a big number.
The car driving public wont like it but all of this has to be paid for from somewhere and it will have to be in premium increases.
Lets see how it all pans out.
I am not invested in any insurance company shares but I work in that world which is why I watch and wonder at some of the things that happen in the industry..........
Yes, order was filled this morning, at around the same time a 300k order was placed and posted at the same time. I believe it was only in that price range for 30minutes or so, then the SP faded out during the day. Definitely, on my radar on Monday morning, if it dips, I am in. This is a bargain.
Ajones, actual trade, some ones order getting filled. Imho
Is the 50k at 114p an actual trade? Or is it a glitch? It just seems a very excessive price to pay when the share was at 109p
I agree! Some very large buys! GLA
Some huge buys today, this should move up next week. I wish, I had bought more today. GLA