Tag: Motley Fool

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened?

Prices for Ethereum (CRYPTO: ETH), Dogecoin (CRYPTO: DOGE), and Solana (CRYPTO: SOL) were all tumbling Monday morning, following in the wake of Bitcoin‘s (CRYPTO: BTC) shift downward late last week. 

As of 11:08 a.m. ET, Ethereum was off by 2.8%, Dogecoin had lost 14.3%, and Solana had fallen 13.7%.

So what?

The cryptocurrency market has been in a freefall since Friday when Bitcoin’s price fell by more than 20%. As of this writing, Bitcoin was changing hands at $48,928, down 28.5% from the all-time high of $68,493 it hit just last month. That’s a fairly massive drop. 

Cryptocurrency investors may be concerned that the Federal Reserve is considering tightening its monetary policy in light of rising inflation. On top of that, both the Omicron variant and the ongoing Delta surge are boosting uncertainty about how long it will be before life will get back to something more like the pre-pandemic normal. 

Traders have generally been fleeing the tech sector as well as they look for safer places to put their money. 

There’s still a fair amount of economic uncertainty right now that may be fueling investor concerns. On Friday, the U.S. reported lower job growth than expected, and over the weekend Goldman Sachs cut its 2022 U.S. gross domestic product growth forecast from 4.2% down to 3.8%. 

The prices of other cryptocurrencies often follow the movements of Bitcoin — when the leading token tumbles, others typically follow suit. That appears to be happening Monday with the prices of Ethereum, Dogecoin, and Solana falling. 

With Monday’s drop, Ethereum, Dogecoin, and Solana are down 7.8%, 33.4%, and 27.5% over the past three months, respectively. 

Now what?

By 2 p.m., Ethereum had bounced back and was up about 1% over the past 24 hours, Solana was near break-even, and Dogecoin was up about 2.9%. The coins were rising again as Bitcoin’s price rose by about 0.6%. 

Cryptocurrencies are prone to volatility and the initial price drop of these coins, and subsequent rise in the afternoon, is a perfect example of that. 

Long-term investors should understand that the cryptocurrency market could experience more volatility, but it doesn’t mean that these coins are a bad investment. It just means that it may be a bumpy ride on the way to bigger gains.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why Ethereum, Dogecoin, and Solana Fell This Morning appeared first on The Motley Fool Australia.

More reading

• Crypto investors missing millions after 2 Aussie exchanges collapse
• Bitcoin (CRYPTO:BTC) price crash dashes crypto’s safe haven status
• Crypto market crash: The latest on Solana, Cardano, Ripple, and Terra
• This crypto could be the Moderna of 2022
• You could’ve made $1 million investing less than $1,500 in these 3 cryptocurrencies

Chris Neiger has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin and Ethereum. The Motley Fool has a disclosure policy.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Bapcor Ltd (ASX: BAP) share price is heading in the right direction at last on Tuesday.

In morning trade, the auto parts retailer’s shares are up 5% to $6.74.

Though, despite today’s solid gain, the Bapcor share price is still down 18% since this time last month.

What’s going on with the Bapcor share price?

Investors have been selling down the Bapcor share price in recent weeks following the announcement of the retirement of its long serving Managing Director and CEO, Darryl Abotomey.

Late last month the company announced that Mr Abotomey would be leaving at the end of February but remain available until the end of June to assist with an orderly transition.

But since the release of that announcement, there was “a marked deterioration in the relationship between the Board and the CEO, such that Mr Abotomey’s position as MD and CEO has become untenable.”

This led to the Bapcor Board electing to bring forward his retirement end date as CEO and director of Bapcor immediately. The company will now look for “a more contemporary leadership and management approach to drive the Company’s growth while also ensuring consistent with changing stakeholders’ expectations.”

The reaction

The Motley Fool’s Analyst, Ryan Newman, has weighed in on recent developments and the company’s future.

He commented: “I would suggest that Darryl Abotomey did a great job of growing the business, from its IPO until now. One thing I have been concerned about, and could be reflected in the “changing stakeholders’ expectations”, is the company’s lack of focus on the changing car parc, in relation to the eventual shift towards electric vehicles.”

Newman notes that the “shift has been slow in Australia, but simply must happen.”  And while it shouldn’t impact the business in the short term, these “strategic shifts absolutely take time.”

In light of this, Newman hopes that an electric vehicle focus will be something that will be “addressed by new management.”

Is this a buying opportunity?

The team at Credit Suisse believe the recent weakness in the Bapcor share price is a buying opportunity. This morning the broker retained its outperform rating, albeit with a trimmed price target of $7.90.

Based on the current Bapcor share price, this implies potential upside of 17% for investors over the next 12 months.

Although Credit Suisse acknowledges that CEO exit has caused significant disruption, it appears confident the company can overcome this and continue its growth.

The post What’s going on with the Bapcor (ASX:BAP) share price and is it a buy? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Bapcor. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Qantas Airways Ltd (ASX: QAN) share price is lifting in early trade, up 4.42% to $5.20 per share at the time of writing.

That will come as welcome news to shareholders who’ve watched shares drop 14.9% over the past month as at this morning’s opening.

The Qantas share price came under renewed pressure from high jet fuel costs, a sluggish reopening of Australia’s state and international borders, and the emergence of the Omicron COVID variant out of South Africa seeing some travel restrictions reinstated.

While the airline remains bullish about the global reopening and the return of international passengers, it’s also turning its attention to the growing demand for air freight.

The growth in Aussie e-commerce, a trend kicked into high gear by the pandemic, shows little sign of reversing. And people ordering their holiday gifts online expect to see them delivered rapidly.

What are the airline’s freight plans?

Qantas is planning to convert 2 of its Airbus 330 planes to carry freight rather than people, with completion expected in 2023.

As 9 News reports, 1 of the planes will be used to deliver parcels for Australia Post while the other will deliver contents internationally.

With the Christmas crunch already here, Qantas will bring a third freight aircraft online this week for Australia Post to deliver gifts around the country.

According to Qantas CEO Alan Joyce (as quoted by 9News):

People are now used to and they expect that when they order something online, it’s there within a day or two. Qantas is getting itself ready for that demand… By Christmas, three Qantas A321 freighters will be in operation for Australia Post…

The converted A330 aircraft for Australia Post will be able to carry around 50 tonnes of cargo each flight, more than double the capacity of other freighters operating for the national postal service.

Once the 2 converted aircraft join the fleet, Qantas will operate 25 dedicated cargo planes.

Qantas share price snapshot

The Qantas share price is down 7% over the past full year. That compares to a 12 month gain of 9% posted by the S&P/ASX 200 Index (ASX: XJO).

Since the 20 March 2020 pandemic lows, Qantas shares have soared 117%.

The post Qantas (ASX:QAN) share price lifts as airline expands freight capacity appeared first on The Motley Fool Australia.

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• Top brokers name 3 ASX shares to sell today
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• Top brokers name 3 ASX shares to buy today

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Shares in James Hardie Industries Plc (ASX: JHX) finished the day in the green on Monday and nudged past their record high to close at $56.39. Meanwhile, the James Hardie share price has started Tuesday’s trading session in the green and is currently up 0.14%.

James Hardie has been on the upward trajectory these past 2 months, with shares bouncing off a low of $47.91 in mid-October. Let’s take a closer look.

Why’s James Hardie trading at all time highs?

Whilst it’s been relatively quiet out of the fibre cement manufacturer’s camp lately, it hasn’t stopped investors queuing up to secure a spot in the company.

Although, the S&P/ASX 200 Materials Index (XMJ) has also bounced off its previous lows in November with authority.

As we walked through the month, the index finished up more than 8% in the green, indicating strengths in the broad sector.

Aside from this, James Hardie is a quality company that has a “really long term growth trajectory and that it’ll do just fine regardless of what bond yields do in the short term”, according to Sage Capital.

The firm reckons that James Hardie covers its bases due to positioning in the fibre cement industry, whilst it continuously adds market penetration.

Part of its strong positioning in the industry is due to its intellectual property that is used in manufacturing fibre cement, Sage says.

Add in its exposure to the US – which is far more expansive than the Australian residential construction market – and there is a recipe for success, the firm believes.

The team at the Macquarie also liked James Hardie’s recent first half results, which it called a robust set of numbers.

It noted the company’s “raised guidance is a positive, particularly set against clear growth investment in [operating expenditure] opex and additional plans to add capacity to the network (including the EU)”.

Meanwhile fellow brokers Morgan Stanley, Jefferies and RBC Capital Markets are each bullish on the shares too.

Each firm values James Hardie at $62, $70 and $64 respectively, implying an average upside potential of around 16% at the time of writing.  

Investors appear to be feeling the same way. For instance, volume of trading on the company’s shares was 103% of its 4-week average volume yesterday.

James Hardie share price snapshot

In the last 12 months, the James Hardie share price has climbed 50% after rallying a further 48% this year to date.

In the past month, James Hardie is up 3% and its shares have climbed 3% in the past week as well.

These results are well ahead of the benchmark S&P/ASX 200 Index (ASX: XJO)’s return of around 10% in that time.

The post Why is the James Hardie (ASX:JHX) share price trading at all time highs? appeared first on The Motley Fool Australia.

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• Record quarter: James Hardie (ASX:JHX) share price pops on 29% profit jump

The author has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Those holding AGL Energy Limited (ASX: AGL) shares might want to keep an eye on the controversy surrounding the company’s Bayswater power station after it was found to house risky conditions capable of harming nearby residents.

An activist group uncovered an internal review on the state of the power station through Freedom of Information. The risks discovered by the review have been backed by an anonymous whistleblower, according to the group.

At the time of writing, the AGL share price is $5.40, 2.35% lower than it was at yesterday’s close.

For context, the S&P/ASX 200 Index (ASX: XJO) is currently up 0.71%.

Review of Bayswater failures uncovered

Healthy Futures, a group of activist healthcare workers, has uncovered an internal review of the Bayswater power station in New South Wales’ Hunter Valley. The review highlights 73 key risks scattered across nearly all parts of the station.

They include the failure of filter bags – designed to trap particle pollutants. According to Healthy Futures, the whistleblower has watched “clouds of ash being released” into the atmosphere.

The ash spill was apparently caused by the failure of a valve in one of the ash collection silos and “filter bags not actually filtering toxic pollutants due to cheap, poor quality materials used”.

The review also details damaged and deteriorating pipework, as well as contaminated liquid entering stormwater systems.

Finally, it uncovered more than a dozen improperly inspected or maintained plant parts.

AGL purchased the Bayswater power station from the New South Wales Government in 2014. Since then, it’s committed to spending around $42 million on environmental improvement programs.

A spokesperson for the company commented:

The outcomes of the review… will ensure that the site can continue to meet its environmental performance requirements until the end of its operating life.

AGL maintains comprehensive HSE policies, standards and training across its sites, and has at all times proactively complied with its obligation to inform the NSW EPA of any notifiable environmental incidents.

A risk to locals’ health

The activist group states ash released by the Bayswater power plant poses a serious health risk to residents.  

In 2009, Upper Hunter GP Dr Tuan Au found particle pollution from coal-burning increases the risk of asthma, respiratory diseases, and premature death in locals.

Tuan’s research found 1 in 6 children in the region had diminished lung capacity.

Additionally, research published in 2020 found PM2.5, a fine particle pollutant from coal and gas-fired power stations, shortens the collective lives of Greater Sydney residents by 620 years annually.

AGL share price snapshot

This year hasn’t been kind to the AGL share price.

Today’s dip included, the company’s shares are trading for 55% less than they were at the start of 2021.

They have also fallen around 2% over the last month.

The post Own AGL (ASX:AGL) shares? Report finds 73 environmental risks at power plant appeared first on The Motley Fool Australia.

More reading

• What happened to the AGL (ASX:AGL) share price in November?
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• Why is the AGL (ASX:AGL) share price having such a stellar day?
• Own AGL (ASX:AGL) shares? Here’s how the company could be set to raise $500m
• Why is the Origin (ASX:ORG) share price outperforming AGL in November?

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Origin Energy Ltd (ASX: ORG) share price has been a disappointing performer in 2021.

Since the start of the year, the energy company’s shares have gained just 1%.

Is the Origin share price good value?

While the underperformance of the Origin share price has been disappointing, one leading broker appears to see it as a buying opportunity.

According to a recent note out of Morgans, its analysts have an add rating and $5.96 price target on the company’s shares.

Based on the current Origin share price of $4.88, this implies potential upside of 22% over the next 12 months.

In addition, Morgans is forecasting a 13 cents per share dividend in FY 2022. This implies a 2.7% yield, bringing the total return on offer to approximately 25%.

Why is Morgans bullish?

Morgans notes that Origin has recently agreed to sell 27% of its stake in the APLNG business to EIG for $2.1 billion. Its analysts believe the deal points to expectations of a stronger for longer energy market.

The broker commented: “We estimate that the implied EV of APLNG is ~A$28.2bn or ~A$15/MMboe of 2P reserves. To get to that valuation we think a long term (post 2024) real price of oil of more than USD75/bbl is needed. Given that EIG will hold a minority stake and that the JV’s LNG is almost entirely sold under long term contract we presume that EIG’s view is for sustained strength in LNG markets.”

All in all, the broker feels this highlights a disconnect between the Origin share price and commodity prices. Something which it thinks investors should be looking to take advantage of.

Morgan concludes: “We still see a disconnect between commodity prices and the share prices of oil and gas stocks. We think there is value to be realised as the market regains confidence in the sector and in ORG in particular with a strengthened and stable balance sheet. We retain our ADD rating and see 14% [now 25%] potential 12-m TSR with upside beyond that should oil prices remain elevated.”

The post The Origin (ASX:ORG) share price has only gained 1% so far this year. Is it a buy? appeared first on The Motley Fool Australia.

More reading

• Is something big about to go down with Origin Energy (ASX:ORG) shares?
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• Why is the AGL (ASX:AGL) share price underperforming Origin lately?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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In a warning to Australians investing in cryptocurrencies, 2 separate local exchanges have collapsed, leaving customers without their money.

A notice on the Australian Securities and Investments Commission website shows the exchange myCryptoWallet falling into liquidation last Friday.

The Motley Fool has contacted SV Partners, who has been appointed as liquidator, for comment.

The company’s website is still live as of Tuesday morning, but its Android smartphone app is no longer available and its Twitter account has closed.

According to The Australian, past social media posts indicated customers were having trouble withdrawing money out of the exchange in recent months.

Even though myCryptoWallet announced in an April tweet that those issues were “finalised”, many users replied that they still did not have access to their funds.

myCryptoWallet users with missing funds are instructed to contact the liquidator.

The exchange was established in March 2017, and claimed to be “a user-friendly, customer-centric, all-inclusive digital currency service” that had “a high level of security and customer safety”.

Blockchain Global Limited crypto customers missing millions

Meanwhile, customers of another Australian cryptocurrency exchange, ACX, have reportedly launched legal action to recover their funds.

ACX was operated by Blockchain Global Limited, which was wound up in October, according to ASIC filings.

The Motley Fool has contacted Pitcher Partners, which was appointed as administrator, for comment.

Blockchain Global’s assets consisted of millions in Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH), reported The Sunday Age.

According to the administrator’s filings to the Supreme Court, the two directors, Allan Guo and Sam Lee, have fled overseas and “are difficult to contact”.

A group of 94 ACX customers is taking matters into its own hands, taking the company and the directors to court for reportedly more than $10 million.

One investor told The Sunday Age he had used the platform for 3 years without issues before withdrawals were blocked without notice.

“I had no suspicion that it was a scam or anything like that. I was buying and selling, everything was functioning the way I thought it should function,” he said.

“It’s become obvious since then that there’s been some sort of wrongdoing.”

The Supreme Court has now frozen 117 bitcoins, worth about $9.2 million, from Blockchain Global’s assets in an attempt to stop them from being sold or moved.

The post Crypto investors missing millions after 2 Aussie exchanges collapse appeared first on The Motley Fool Australia.

More reading

• Bitcoin (CRYPTO:BTC) price crash dashes crypto’s safe haven status
• You could’ve made $1 million investing less than $1,500 in these 3 cryptocurrencies
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• Here’s how these 4 top traded cryptos performed in November
• Here’s why Charlie Munger says crypto should have ‘never been invented’

Motley Fool contributor Tony Yoo owns Bitcoin and Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Bitcoin and Ethereum. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Magellan Financial Group Ltd (ASX: MFG) share price is tumbling lower again on Tuesday.

In morning trade, the struggling fund manager’s shares are down 3.5% to a 52-week low of $29.96.

Why is the Magellan share price falling?

Investors have been selling down the Magellan share price following the release of an announcement after the market close on Monday.

According to the release, the Board of Magellan has been informed by Dr Brett Cairns that he has resigned as Chief Executive Officer and will be leaving the company.

The release explains that Dr Cairns is leaving for personal reasons.

In response to the news, Magellan’s Executive Chairman, Hamish Douglass, commented: “Brett has been a long-standing and key member of our Magellan team. He commenced his journey with Magellan in 2007 as a Non-executive Director before transferring to our executive ranks in 2015, initially as Executive Chairman and then becoming CEO in 2019.”

“Brett was instrumental in the development of Magellan’s exchange traded products and in the development of Magellan’s retirement product, FuturePay. On behalf of the Company, I would like to thank Brett for his extensive contribution to Magellan since 2007 and wish him all the very best in his future endeavours,” he added.

What now?

Magellan will now be looking for a new permanent CEO, but in the meantime it has promoted its Chief Financial Officer, Ms Kirsten Morton, to the top job on an interim basis.

The company notes that Ms Morton has been the Chief Financial Officer of Magellan for over eight years and has a detailed understanding of the company and its operations.

Mr Douglass said: “Kirsten is ideally positioned to take on the responsibilities and drive Magellan forward. The Board and I are very pleased to be working with Kirsten.”

The Magellan share price is down ~44% in 2021.

The post Why the Magellan (ASX:MFG) share price is sinking to 52-week low appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• Why is the Magellan (ASX:MFG) share price slipping today?
• The Magellan (ASX:MFG) share price dropped in November 2021. Here’s what happened
• 2 ASX 200 shares with strong dividend income prospects
• 2 ASX shares I regret and 2 that I don’t: expert

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

The price of Shiba Inu (CRYPTO: SHIB) had fallen more than 15% over the last 24 hours as of 10:37 a.m. ET today, in line with moves seen in the broader cryptocurrency market.

So what

Cryptocurrencies got hammered over the weekend, with the price of Bitcoin (CRYPTO: BTC) at one point plunging to around $42,000 briefly before coming back up to around $48,000. Large moves in Bitcoin tend to trigger the rest of the market.

But the interesting thing is that Bitcoin and most other cryptocurrencies seem to be struggling from the same concerns as traditional equities, such as the omicron variant, higher inflation, rate hikes coming sooner, and continued struggles in the Chinese real estate market.

“This crash in the market definitely shows us that bitcoin isn’t fully decoupled from the global markets,” Marcus Sotiriou, a trader at digital asset firm GlobalBlock, told CNN. “It hasn’t gotten to that stage yet where it’s big enough to hold its own.”

Sotiriou also said it looks like institutional crypto traders are booking profits before the end of the year, with the uncertainty over market conditions in 2022.

Now what

The price of Shiba Inu clearly seems to be moving with broader crypto prices at the moment, but I’ve never believed this cryptocurrency, in particular, is anything more than essentially meme investing.

There are no solid fundamentals behind the token, although given its popularity I am sure it will stay relevant in the near term. Overall, I would stay away, as investments lacking the fundamentals can really drop hard when market conditions get tougher. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why the Price of Shiba Inu is down today appeared first on The Motley Fool Australia.

More reading

• 3 cryptocurrencies that crushed Shiba Inu in November
• You could’ve made $1 million investing less than $1,500 in these 3 cryptocurrencies
• Shiba Inu soars and crashes, but it’s still holding up this week
• Here’s how these 4 top traded cryptos performed in November
• 2 reasons why Shiba Inu surged more than 30% today

Bram Berkowitz owns shares of Bitcoin. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Insurance Australia Group Ltd (ASX: IAG) share price will be in focus this morning after it released its latest business update.

The group outlined its growth agenda and outlined its FY22 guidance on margin and gross written premium (GWP).

Shareholders will be hoping that the update will help the IAG share price find a floor after a dismal year.

IAG’s margin squeeze

Management is forecasting low single-digit growth in GWP, which is inline with its previous prediction. Reported margin is tipped to range between 10% and 12% for the current financial year.

That’s below the 13.5% and 15.5% target that it outlined in its FY21 results presentation. The shortfall is largely driven by a $280 million increase in its natural perils allowance to just over $1 billion.

That equates to a 350-basis point (3.5 percentage points) impact on its reported margin.

Silver-lining for the IAG share price

But perhaps that is a tat conservative as modest tailwinds from the impact of COVID-19 aren’t factored into the guidance.

The rolling lockdowns in Victoria and New South Wales mean fewer motor vehicle accident claims, although inflation will eat away at some of these gains.

Medium-term targets

“Over the past couple of years, as an industry and particularly as a company, we’ve had to face some serious challenges,” said IAG’s chief executive Nick Hawkins.

“We’ve appropriately provided for these and restored capital where required to address all the issues from a balance sheet point of view.

“We haven’t changed our value proposition since we presented it in February this year. Over the medium-term, we are aiming to deliver a targeted cash ROE of 12-13%, an insurance margin of 15-17%, and a growth profile. Our aspiration is to deliver these financial goals on a sustainable basis.”

Hunting for 1 million new customers

IAG’s goal of adding a million new customers over the next five years will also provide economies of scale. The group believes it can keep expenses flat in FY22 and it currently has 8.5 million customers.

It plans to get new customers by targeting new regions and market segments and using technology to increase efficiency and reach.

The insurer told investors it should have confidence in the group’s longer-term outlook. The turnaround in its Intermediated Insurance Australia business should add at least $250 million of insurance profit by FY24.

Meanwhile, its Direct Insurance Australia division and New Zealand business is rolling out an ambitious growth strategy.

IAG share price lagging its peers

Fingers crossed that management can deliver on its growth targets given the sorry performance of the IAG share price.

The ASX insurer has lost around 16% of its value over the past year. In contrast, the QBE Insurance Group Ltd (ASX: QBE) share price and Suncorp Group Ltd (ASX: SUN) share price have rallied 20% and 7%, respectively.

The post The IAG (ASX:IAG) share price on watch following its trading update appeared first on The Motley Fool Australia.

More reading

• Own QBE (ASX:QBE) shares? New CEO reveals insurer’s biggest challenges
• What happened to the IAG (ASX:IAG) share price last month?
• JP Morgan is bullish on the Suncorp (ASX:SUN) share price. Here’s why
• Own IAG (ASX: IAG) shares? Here’s why the company is facing a shareholder class action
• Suncorp (ASX:SUN) share price drops as insurance sale completes

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