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My point wasn't about getting a divi I don't think we should be getting any divi at the moment.
My point was if Admiral has had much fewer moter claims and made and an extra 30% profit then many other car insurance companies ie Saga should be in the same position, and we could see Saga's profits increase as well.
Agree in principle.
But....
Additional insurance profit, will be dwarfed by travel loss.
I'm in here, but concerned that Saga has no direction and it's future is questionable.
I have to ask you this - why possibly would you buy into a company that you have so little confidence in? Why would you not run a mile and sell?
BlueVeiner, if that was directed at me, it is simply that I can demonstrate over the greater part of 50 years that I have many more successes than failures in my choice of investments. My portfolio once I retire will need to last for a further 30 years, maybe more. A 30 year timescale can afford a higher degree of risk. Although the SP in Saga has collapsed this year by 70% the cause is obvious. My portfolio although down a whopping 34% in the first 2 weeks in March is up this year by almost 6%. Saga is one of 52 holdings and represents under 1% of portfolio wealth.
My question was aimed at Selecta6 who posted that (s)he is "concerned that Saga has no direction and it's future is questionable".
Only just read board, Blueveiner.
I caught them on their flotation some 8(?) years ago.
On the basis that they deal with over 50's and they are on the increase.
So, what could go wrong!!!
SP having dropped over 90% pre covid, I'm still awaiting an answer from their share helpdesk!!
So, banged in another £10K, at 15.75p, to recover all my prior losses.
What could go wrong?
Company could lose it's way, and become directionless.
Now they blame covid. Well, their problems pre-date covid!!
Takeover is the only answer, to my losses.
A couple of less car repair claims, ain't going to do it.
Most of their underwriting is reinsured so there is unlikely to be much benefit from low claims.
Just pray they breakeven this year. The market has marked this down by £350m for having nil profits this year (last year cashflow was £93m).
"Most of their underwriting is reinsured so there is unlikely to be much benefit from low claims".
It was worthy of mention in the trading update though:
"Current year claims frequency from March onwards has been much reduced as a result of lower miles driven following the start of the COVID-19 lockdown. The Group has not recognised any COVID-19 related claims upside in current year results or financial projections".
So maybe we'll get a pleasant surprise when the half-year results are announced.
Pianista,
Yes much of it is reinsured by AICL which wait a minute Saga owns. Saga owns a re-insurance business? who knew?
They have also stated that the benefits from such a drop in claims will not be realised until the next financial year
sorry meant for zccax77
I think it's only home insurance that is reinsured with a third party, so I'm hopeful of some much-needed bunce from reduced claims this year.
The Group’s in-house underwriter AICL continues to play an important role on the motor panel, providing a source
of competitively priced risk, primarily focused on lower risk drivers. AICL also underwrites a portion of the home panel,
although all the risk in the home insurance business is passed on to a third party insurance company.
You are right, so the reduced claims on motor should benefit Saga.
I’ve been in this twice before once a year ago ( that hurt )and the next time I lost much smaller ( from just above 50p ) this surely hasn’t got much further to fall .... has it? I’m considering getting back in but to undo previous losses I’d need to see 35p from here. What’s people thoughts on the floor here I’m think 10-12p ????
It may hit 10 to 12p. But eventually this will go up as long as cruises start up again. My advice even though I have already bought in is to wait until some confirmation of cruise activity from the UK starting up and then buy (assuming less than 23p or so)
Mark - question I think you should ask yourself is do you feel Saga is going bust or back to 35p ?
If you believe it can weather covid then 35p isn't at all aggressive pricing for a business with current market cap of 165mm and underlying profit from its insurance business >100m.
So if you feel it is worth investing why try catching the absolute bottom ... why not put half your money in now at 14.5p and if you get a chance to add in the next couple of weeks at 12p do so.
For my part I topped up at 15-17p and am expecting a rebound when interims get delivered within the next month - long before any clarity on cruise business is available.
Thanks retired banker. I think I may well do exactly that.
Rupans.... Spot on! And although this refers to a rival ship, once there is SOME revenue from cruise operations for Saga, the immediate impact will be seen and reflected in eliminating many of the fixed costs of an anchored ship.
The pareto principle for Saga is not perfectly noted, but is a background snippet. 80% profits are from one division (insurance) and 80% costs are in another (travel). Revenues are (broadly) evenly split between insurance and cruises.
Just averaged down - for the last time hopefully - at 14.4p. Surely that was the bottom?
assuming no more bad news for travel....
I would top up if I had the funds
I just topped up at 14.50p. Although the business is apparently split 50/50 travel/insurance I think Saga will be looking to alter that ratio in favour of insurance where there is more profit and less unpredictability. Their loyal customer base gives them a captive audience to which they can sell all types of insurance.
I hope you have not "topped up" too soon. If this goes under 14p we might see it go under 10p soon after.
"Surely Saga could give us an update on how the trading has gone in the first half."
yeah..it has been 2 months since any further covid update ...but...the Interims last year were on 19th September...so..we may have to wait for those....i think though that the share price will over sell and get a bounce from that....too much bad news priced in...in my opinion...but..you never know ..
The suspicion is that there will be no profit declared this year, and quite probably little profit next year either. Almost all the profits are attributed to the Insurance division and for as long as its cruise and river ships remain anchored up, then every penny of profit will be spent on the costs associated with ships.
From a simple overlay of the share price with Carnival Cruises, the pattern is, to all intents and purpose, a mirror of the other. The inference is that Saga is considered first and foremost to be a cruise operator and not an insurer. If a viable and tolerated vaccine is approved by the late autumn then Saga has a chance to survive intact, but it seems to me pretty inevitable that the company will be split up. And my back of a fag packet numbers suggest that shareholders would be financially better off if the company were broken up. Perhaps Mr Sutherland will hoist the forsale notice? I rather hope that to happen.