Our Q&As are emailed in our Saturday Morning Report, find the answer to this question below.
Hi there, I can see you thought the risk/reward on AUB was just average at around $24 in January, but since we have seen the share price over $27, but back down now to ~$25.50. Does the current SPP represent decent value at $24.00 given the above in your opinion? Love your work! thanks.
Hi Campbell,
We would be keen buyers of AUB into weakness ~$24, unfortunately we are not an existing eligible shareholder:
With the stock trading at $25.30 on Thursday it’s hard to imagine the SPP not being heavily backed.
For subscribers not familiar with AUB Group (AUB), it is an insurance broker that also has underwriting agencies. When a business is looking for insurance most of the time, they use a broker to get the adequate cover. That broker could well be using AUB as the provider of the cover.
AUB continues to trade strongly having rewarded investors who backed its $350mn capital raise at $19.50, back in June 2022, which funded the acquisition of Tysers for $880mn hence we see no reason not to have faith this time as management looks to strengthen the balance sheet.
As a non-holder of AUB we now like the stock ~$24.
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