Tuesday, 18 November 2014

Prudential - good theme stock, just wait for weakness

The last time I wrote about the London-listed Prudential (link here) I concluded that 'it is all about embracing weakness 1300p, 1250p etc - pick your spot.  The key is to get onto the train with at least one name in the space'

The other 'train' would be the Hong Kong listed AIA who are an even purer play than the Prudential on the growth of the Asian insurance market. They have continued to grow well over recent months as per their latest results disclosure.

So what about the Prudential?  Today's Q3 IMS statement reads well enough with its reference to

'...year-to-date double-digit growth in both new business profit and new business APE sales in each of our three life insurance businesses in Asia, the US and the UK, and net inflows of £9.6 billion in our asset management businesses'

That seems consistent with the group's strategy as disclosed in a recent presentation:

I did note however that the IGD surplus was unchanged at £4.1bn from the end of H1.  Given the share's good performance recently...

...and even their outperformance versus AIA over the last couple of years...

...I would still buy only on weakness.  1350p and each 50p down seems reasonable to me.  Still a good theme, just look to embrace any weakness...and I am still holding onto my AIA.  

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