Worse before it gets better27 Feb 2020 22:48
I recently sold my 16k of Saga shares for a loss, purchased in at 44p. My view is that Sagas value will get much lower before it gets higher. Yes I do think it will get better, though we will be waiting a long time, with much stress and volatility. My main reasons are:
-Coronavrius (state the obvious), ships could easily be grounded or trips cancelled. Further to this it will put off the elderly from booking cruises and holidays, particularly if their health is fairly fragile as many old peoples are.
-Imminent FCA general insurance market study impact. This will be a further negative impact to sagas SP when released, though again we will all argue a market overreaction and that Fixed price partly addresses this. In a way it does, but it will still have a negative financial impact on customers saga hikes premiums up on who have auto renewed for years.
-insurance commoditisation is growing in the industry and whilst sagas fixed price is a good feature, it will only be unique for a short period when other insurers follow suit (potentially better it). I think the risk of this happening is compounded by the FCA changes that will be announced in March.
My view for potential buyers is to hold until the market study impact is understood and when the world has a better handle on the current, so called "pandemic"
Keen to heat your views on this, good luck all