LIB­ERTY HOLD­INGS

Finweek English Edition - - FEEDBACK - Fin­week Rob

I’m quite in­ter­ested in the in­surance sec­tor at the moment and I’m con­sid­er­ing buy­ing Lib­erty Hold­ings – do you think this is a good trade idea? There is an ob­vi­ous dis­claimer here that we don’t dis­pense f inan­cial ad­vice and we be­lieve you should bounce this off a li­censed f inan­cial ad­viser or your bro­ker but here is our 2c.

Lib­erty (LBH) came in slightly ahead of earn­ings con­sen­sus forecast and the spe­cial div­i­dend was a pleas­ant sur­prise. But it should be re­mem­bered that this is now be­ing fac­tored into the price as it stands. Per­son­ally, we are quite con­cerned that eq­uity mar­kets are start­ing to look fairly ex­pen­sive – specif­i­cally in the US and SA – and we wouldn’t be sur­prised if there is a bit of a pull-back. LBH is ob­vi­ously geared to­ward the stock­mar­ket per­for­mance, which has en­hanced earn­ings quite sig­nif­i­cantly.

If it is for a longer-term in­vest­ment, then an earn­ings mul­ti­ple of less than 10 and a div­i­dend yield of nearly 5 look quite at­trac­tive. If you are look­ing at a shorter time frame, I would per­haps wait for the share to go ex div­i­dend and then

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