TWR - Tower Insurance

[lorraina]

Rising share price on solid volume,augers well for holders.

Certainly proving to be the case.

[Gerald]

Strategic review getting a little long in the tooth. 8ish months?

Can't have had any offers or they surely would have had to disclose.

[Left Field]

Crikey both TWR and HGH knocking on the $1.10 door.

[Basil]

I have the quinella bet covered now 

[Left Field]

I have the quinella bet covered now 

Now Tower ahead by a nose.....lol

[Greekwatchdog]

I have the quinella bet covered now 

Exactas pay more then you have to pick the winner and 2nd.

[KW]

Crickey, might be a long nose of half a head by the end of the day lol

The TWR chart is a thing of beauty.  Anyone following a momentum strategy who picked it up around 63c when it broke out in February would have done very well.  No need to have bought before Feb or tried to pick the lows.

The recent moves look a bit climaxy though.  So probably overdue a pullback.  

[LoungeLizard]

The TWR chart is a thing of beauty.  Anyone following a momentum strategy who picked it up around 63c when it broke out in February would have done very well.  No need to have bought before Feb or tried to pick the lows.

The recent moves look a bit climaxy though.  So probably overdue a pullback. 

Exactly. I waited until April when the trend had really bedded in and bought at 77c. Still - a 45% return in 4 months , so no complaints.

There could be some profit taking I guess, but it would be a brave investor that sells now as we near end of year trading and an increasing likelihood of a big payout. Still well undervalued, so I'm hanging in there for now.

[lorraina]

I am usually late to any party.Often leave too early,but enjoy myself while I am there...?..lol
Started buying on 15th April at 72.5 cents and 73.5 cents.
Added more on 17th April at 82 cents and topped up on 28th May at 83 cents.
Received the divie on 12th June.
The Chairman Michael Stiassny runs a good ship.He is also The Chairman of my largest holding 2CC.[which I have never stopped buying].

[LoungeLizard]

I am usually late to any party.Often leave too early,but enjoy myself while I am there...?..lol
Started buying on 15th April at 72.5 cents and 73.5 cents.
Added more on 17th April at 82 cents and topped up on 28th May at 83 cents.
Received the divie on 12th June.
The Chairman Michael Stiassny runs a good ship.He is also The Chairman of my largest holding 2CC.[which I have never stopped buying].

Yep, pretty much my approach. I figure that if I turn up a bit late to the party I've got a better chance of telling whether I'm in for a good time or a punch-up!

[Basil]

The TWR chart is a thing of beauty.  Anyone following a momentum strategy who picked it up around 63c when it broke out in February would have done very well.  No need to have bought before Feb or tried to pick the lows.
The recent moves look a bit climaxy though.  So probably overdue a pullback. 

Just getting warmed up I think  .  I think the real pleasure will come with the inevitable NZX50 inclusion in due course.  End of session report
https://www.nzherald.co.nz/business/mixed-bag-for-nz-stocks-with-micro-cap-firms-the-main-gainers-market-close/5MA2K2E7TVFHTH6HIP235UYERA/
\ Paywalled: Excerpt: According to Knight, the "highlight" of the day was Tower Insurance, which rose 4.5c or 4.19% to $1.12. Knight said he believed Tower's success was due to Craigs initiating company coverage on Tuesday at an overweight position with a target price of $1.46.
He said Craigs' private wealth network is taking an interest in it and that up until this point, it has not been a well-covered stock.
Forbar at $1.50 if I recall correctly.  Let's split the difference and call it $1.48 

[Shareguy]

Craigs latest

Added to conviction list and initiation of coverage. Its very detailed 39 pages

Tower of Strength: adding Tower with a 2.5% weighting
Concurrent with our research team's initiation report published overnight ( "Stake your claim"), we add Tower Insurance into the Kiwi Conviction Portfolio with a 2.5% weighting (reflecting its smaller market cap and liquidity). Tower is New Zealand's fifth largest general insurance company, with c.5% market share and over 300k customers across New Zealand and the Pacific. Following a period of significant investment under the stewardship of TWR's new management team, the Company has developed into a well capitalised, "digital-first" player in a legacy industry. While NZ is prone to natural disasters, TWR is now a market leader in risk-based pricing, which has become core to the Group's value proposition. This strategy allows TWR to 1) proactively assess the impact/risks around climate change across its book, 2) lower claims loss ratios & reinsurance costs, and 3) reduce the cross-subsidisation of high-risk policies. Given TWR is seeing operating metrics improve, has a strong runway for market share growth (in an industry with favourable dynamics), and offers a compelling prospective gross yield of 11.2%, we see the Company's current discount to industry peers as unjustified.

Compelling yield & low PE, with discount to peers unjustified
TWR benefited from benign weather in 1H24 and delivered uNPAT of $36.0m, with no large events recorded. FY24 guidance is for uNPAT of 'greater than $40m', but this assumes full utilisation of the large events allowance of $45m. With approximately two months remaining in FY24 we have assumed $17m for large events, and so our uNPAT estimate is $64m, or EPS of 16.8c. TWR is targeting FY25 uNPAT of $40-60m (CIPe $53m / EPS 13.9c). After normalising for the lower than expected claims in FY24 we estimate TWR is currently trading on a forward PE of 7.6x (vs. sector peers at 12.3x), with a forward cash dividend yield of 7.1% (9.9% gross).
In strong contention for index inclusion from Dec-24
Based on our analysis of the NZX50, we do not expect TWR to enter the index in the upcoming Sep-24 rebalance due to failed liquidity in the Mar-24 quarter. However, we we see a strong possibility of TWR being included at the Dec-24 rebalance.
Price Target $1.46
Our Price Target of $1.46 is the average of: 1) a forward PE of 9.2x ($1.61) based on TWR's historical discount to sector average PE multiples, and 2) 1.4x BV ($1.31) based on our estimate of TWR's 3-year forward ROE relative to its post-tax Ke. Our Price Target implies a forward PE of 8.1x and a cash dividend yield of 6.5% (9.0% gross).
to 1.46
%

11.2 percent gross yield FY25 estimation says Craigs.

Outperform $1.46 FB target price $1.50

Disc/ holder on fundamental's and likely NZX50 inclusion in December re balance. Added more yesterday.

[Basil]

Tower of Strength:

Thanks for sharing mate and that sums it up very well.  Agree on December index inclusion, that's much more likely than Sept 24 or March 25.

[Poet]

Thanks for sharing mate and that sums it up very well.  Agree on December index inclusion, that's much more likely than Sept 24 or March 25.

Yes, provided they aren't subject to takeover in the next few months,then it should be a very good end to the year.
Late November they will announce NPAT around $60 to $70 Million, a decent dividend and possible capital return.
Early December announcement of inclusion in NZX50 Index

Bring on a $2+ shareprice

[lorraina]

Old saying add to your winners,sell your losers.
Well I just added to my TRW holding at $1.13.