Morning Report Wednesday 17 June 2015
** Woolworths (WOW) downgrades its earnings guidance this morning. We remain bearish WOW – see recent report.**
Yesterday, the market was pleasantly surprised to hear that Warren Buffett, one of the worlds greatest long term investors, had purchased a 3.7% ($500m) stake in Insurance Australia Group (IAG) which can rise to 14.9% over 10 years. This partnership with IAG is likely to be the first of many ventures into Asia for Berkshire Hathaway and a big tick, sentiment wise for IAG. The joint venture is dilutive of earnings initially for IAG, but with the deal effectively underwriting the share price at $5.50, there are some clear investment opportunities as we can feel comfortable that no “surprises” are likely to be lurking in the IAG books. Firstly lets look at the simple numbers for IAG and its peers:
Show more...
