Yahoo Finance Is It Too Late To Consider Buying QBE Insurance Group Limited (ASX:QBE)?
Today we’re going to take a look at the well-established QBE Insurance Group Limited (ASX:QBE). The company’s stock received a lot of attention from a substantial price movement on the ASX over the last few months, increasing to A$11.64 at one point, and dropping to the lows of A$9.75. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether QBE Insurance Group’s current trading price of A$10.68 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at QBE Insurance Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
View our latest analysis for QBE Insurance Group
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What is QBE Insurance Group worth?
According to my valuation model, QBE Insurance Group seems to be fairly priced at around 6.5% below my intrinsic value, which means if you buy QBE Insurance Group today, you’d be paying a fair price for it. And if you believe that the stock is really worth A$11.42, then there’s not much of an upside to gain from mispricing. Furthermore, QBE Insurance Group’s low beta implies that the stock is less volatile than the wider market.
What does the future of QBE Insurance Group look like?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Though in the case of QBE Insurance Group, it is expected to deliver a negative revenue growth of -3.5% over the next couple of years, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.
What this means for you:
Are you a shareholder? Currently, QBE appears to be trading around its fair value, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock beneficial for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on the stock, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping an eye on QBE for a while, now may not be the most advantageous time to buy, given it is trading around its fair value. The price seems to be trading at fair value, which means there’s less benefit from mispricing. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven’t considered today, which can help crystalize your views on QBE should the price fluctuate below its true value.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on QBE Insurance Group. You can find everything you need to know about QBE Insurance Group in the latest infographic research report. If you are no longer interested in QBE Insurance Group, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
