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How I Avoided an RSA Disaster - Then Walked Straight Back Into It.

By Malcolm Stacey

22 September 2015 00:39

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Hello Share Fans. Well, that was a bummer. There I was expecting Zurich to put in a strong offer for RSA (RSA) the big insurance combine. There was talk of £5.50 from the present going rate of 5.15p which had already been boosted greatly by the preliminaries to merger.

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Comments

alcira16247

22 September 2015, 04:07

Malcolm

Commiserations …… bloody bad luck! Timing, eh?

There was no doubt that had the Zurich bid succeeded it would have proven a good exit for RSA’s long suffering shareholders. Now numerous brokers are now downgrading RSA, arguing the trading and earning growth outlook is very poor.

Trading just above £4.05 giving a forward P\E of 16 and a dividend yield of 2.6%, RSA seems fully valued by the sectors standards, too.
After selling off non core and poorly performing businesses CEO Stephen Hester and team are going to have a hard job on hand delivering future enhanced earnings growth from a smaller business trading in a harsher environment.
It maybe a long wait for the share price to recover anywhere near the £5.50 mark, unless another bidder appears.
Malcolm Stacey

22 September 2015, 05:02

Thanks, Alcers. It’s another bid I’m hoping for. But in these testing times, I agree it’s looking less likely.
winsome147

22 September 2015, 11:10

Alcira, Aviva managed to grow sp hugely while selling off parts of the business a few years ago. RSA are in a similar position. There is merger frenzy at the moment and this will continue for another year or so I think. It’s only warming up now. Then we will see the market top out. History repeats itself