Are these Insurance Stocks holding any value?

FlexiGroup Ltd

FXL Dividend Details
 
Strong financial performance with guidance upgrade: FlexiGroup Limited (ASX: FXL) has completed the acquisition of Fisher & Paykel Finance from Fisher & Paykel Appliances in March 2016 and will be shortly increasing its FY16 cash net profit after tax (NPAT) guidance to include the earnings contribution from Fisher & Paykel Finance. Previously FXL had announced results for the six months ending December 31, 2015 with cash NPAT at $44.3 million, an increase of 4% over the first six months of FY15.
 


Performance in New Zealand Leasing (Source: Company Reports)
 
Standout performance in New Zealand Leasing resulted in increased in its profit by 63%. FXL is looking to focus on relationship driven organic sales and strategic acquisition opportunities. FXL stock is currently at low price to earnings ratio (P/E) due to a decrease of about 20.33% (as of March 29, 2016) over the past three months. Hence we recommend a “Buy” for FXL at the current price levels of $2.41
 
 
FXL Daily Chart (Source: Thomson Reuters)
 

Cover-More Group Ltd

CVO Dividend Details
 
International business gaining momentum: Cover-More Group Ltd (ASX: CVO) announced its financial results for half year ended December 31, 2015, with growth in Asia gross sales by 28% and earnings before interest, tax, depreciation and amortization (EBITDA) by 75% over the previous corresponding period. Offshore growth was the highlight, especially in India (up 60%), UK (up 29%) and China (up 23%). Overall, CVO had gross sales increase of 6.6% at $235.6 million but EBITDA was down by 16.4% at $20.4 million. The decline in EBITDA was mainly due to increased underwriting premium, decline in assistance earnings, investment in overseas business and one-off costs.
 


Roadmap for International Business (Source: Company Reports)
 
CVO stock has declined by about 31.88% (as of March 29, 2016) over the past three months and is currently trading at reasonable prices. We thus recommend a “Buy” for this stock at the current price levels $1.495
 
 
CVO Daily Chart (Source: Thomson Reuters)
 

Rural Funds Group

RFF Dividend Details
 
Focus on new acquisitions: Rural Funds Group (ASX: RFF) announced the acquisition of three Macadamia Orchards in Queensland in February 2016. This is RFF’s first step into the Macadamia industry. RFF also announced its financial results for the half year ended December 31, 2015 with total assets at $302.5 million, an increase of 19.7% from $252.7 million on June 30, 2015. The group acquired Kerarbury property and commenced almond orchard development along with partly completing almond orchard development on Tocabil station, both being leased to Olam. RFF stock rallied 31.88% (as of March 29, 2016) in the last six months and is now at a slightly high price to earnings ratio (P/E) and close to its 52 week high price. The stock has been added in S&P/ ASX 300 Index as per the March quarterly updates by S&P Dow Jones Indices. We recommend that investors “Hold” on to this stock at the current price levels of  $1.50
 
 
RFF Daily Chart (Source: Thomson Reuters)
 

Mcmillan Shakespeare Ltd

MMS Dividend Details
 
Massive growth in key financial metrics: Mcmillan Shakespeare Ltd (ASX: MMS) has been appointed as one of six vehicle leasing providers for New South Wales government via Interleasing (Australia) Limited, its wholly owned subsidiary. MMS also announced its half year report for the period ending December 31, 2015 with revenue increasing by a significant 34.4% to $243.5 million, earnings before interest, tax, depreciation and amortization (EBITDA) up by 38.9% to $65.8 million and net profit after tax (NPAT) up 25.1% to $38.9 million. MMS also announced an interim dividend of 29 cents per share.
 


Significant 10 year CAGR of NPAT (Source: Company Reports)
 
The company’s performance is driven primarily by its focus on organic growth, new businesses and continuous focus on cost control, despite the highly competitive fleet leasing market in Australia. The MMS stock is currently trading at a reasonable price to earnings ratio (P/E) and has a good annual dividend yield and we recommend a “Buy” on this stock at the current price levels of $12.41
 
 
MMS Daily Chart (Source: Thomson Reuters)
 

Genworth Mortgage Insurance Australia Ltd

GMA Dividend Details
 
Attractive opportunity: Genworth Mortgage Insurance Australia Ltd (ASX: GMA) announced full year financial results with underlying net profit after tax (NPAT) of $264.6 million, a drop of 5.3% from FY14. This was a result of lower sales (gross written premium) which declined 20% to $507.6 million, indicative of lower average loan to value ratio (LVR) mix of business and the changes in customer profile during the year. However, the revenue (net earned premium) increased by 5.4% to $469.9 million. Rating agency Moody’s reaffirmed the GMA’s insurance financial strength rating of A3, while Fitch Ratings has earlier assigned an A+ rating with a stable outlook. The above financial results follow the changes in top management at the company, with Ms. Georgette Nicolas being appointed Chief Executive Officer (CEO) and Mr. Luke Oxenham as the Company Secretary. GMA is focused on its strategic priorities to deliver long-term value amidst challenging current business environment. The stock of GMA is currently at a cheaper price to earnings ratio (P/E), having declined by 14.12% (as of March 29, 2016) in the past three months. With an outstanding dividend yield, we recommend a “Buy” on this stock at the current price levels of  $2.30
 
 
GMA Daily Chart (Source: Thomson Reuters)
 

Suncorp Group Ltd

SUN Dividend Details
 
Strategic refinements to withstand the volatile market: Suncorp Group Ltd (ASX: SUN) had announced subdued financial data for the six months ending December 31, 2015 with a decrease in net profit after tax (NPAT) to $530 million from $631 million during the previous corresponding period. The profit contribution from general insurance division was down by 29% to $297 million from $419 million. The company announced interim dividend of 30 cents per share, a payout of 69% of cash earnings. The new Chief Executive Officer (CEO) targets to broaden SUN’s customer relationships, to improve underlying profit and deliver a sustainable return on equity (ROE) of at least 10%. SUN is looking at strategic refinements to boost growth and build more resilience to volatility. The company looks to offset challenges created by uncertainty in global financial markets, climate change and cyber security in its business. The new operating model with business units namely, Banking & Wealth, Insurance Australia and Insurance New Zealand are expected to drive growth going forward. The company stock has been performing well in the past month with a growth of 2.32% (as of March 29, 2016) and we believe it will continue to generate strong growth in future. Thus, we recommend a “Buy” on this stock at the current price levels of $11.59
 
 
SUN Daily Chart (Source: Thomson Reuters)

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