Is it time to buy AMP?
Hi team, AMP's share price is almost at all time lows. Is it a buy from your perspective under $1?
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Answer
Hi Tammy,
It can be a very tricky and dangerous strategy identifying when to enter potential turnaround stories – we have bought 3 in our Flagship Growth Portfolio in recent weeks, Lend Lease (LLC), Magellan (MFG) and Elders (ELD) and although we’ve been extremely patient with all 3 history tells us they will still deliver plenty of stress along the way.
- Underperforming/struggling stocks can spend many volatile months as investors 2nd guess when the company will finally turn the corner.
In the case of AMP its been falling for over 20-years with plenty of money being lost along the way by “bargain hunters”. This week has seen the stock plummet over 10% after the company lost a class action with financial planners which will ultimately prove expensive although the exact amount is hard to determine and that uncertainty is the issue in the short term.
In April we said MM was cautiously bullish toward AMP around $1 and this remains true although following this latest “bad news” our ideal accumulation zone is in the 90-95c region i.e. buy fresh panic lows, but this is as very high risk call in our view.
