Overview: QBE Insurance Group Limited (QBE) is a general insurance and reinsurance company with operations in 38 countries. The headquarter is in Sydney, NSW. In Australia, QBE provides localised services in each state and territory. The company is listed on the ASX since 1973 and historically aims to boost growth through acquisitions.
Catalysts: Over the last three years QBE moved sideways, finding support at $10. Last year the Group announced strategic reviews of its US-based middle-market operations. QBE aims to return to profitability in its North and Latin American operations by selling parts of its underperforming operations. The Group returned to profit during FY14 and with much of the changes now complete, management can focus on delivering profitable growth.
Hurdles: QBE’s share price has underperformed the broader market since the GFC and has suffered from volatility. Whilst the company aims to transform the underperforming operations, there is no guarantee that it will result in earnings growth. A strong USD may discount its domestic operations as the Group reports in USD.
Investment View: After years of underperformance and heavy volatility QBE is refining its operations, as the management aims to return to sustainable and predictable growth. Dividend yield is expected to gradually increase during FY15. QBE offers exposure to an established company with an international footprint.
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