Aegon N.V - Too good to be true?

[jesuslives2000]

This firm has a P/C ratio of 1.08 and a P/B ratio of 0.42. whats the catch? Debt to Equity is at 0. Why is no one talking about this? What am I missing?

 

[helloiamjma]

@jesuslives2000 I'm from the Netherlands myself, which makes me able to read into Dutch sources as well as knowing some people who work at Aegon.

Positives:
- The market acts like there are still a lot of problems, but these problems have long been fixed.
- They improved their solvency by selling a few departments, so that they would need less capital. Which is a good thing as they achieved this goal, but this made them, according to investors, think too little about future activities, thus resulting in a loss.
- They have a long-term focus
- They Bought Mercer, which gives them a way to enter the (huge) US retirement market
- It's scalable as their costs are mostly fixed, even if they get more customers. So their profit could grow exponentially!
- It's really cheap, and it might grow a lot when people see their 2018 figures (at the start of 2019). Morningstar has said it's 20% under it's fair value.
- It pays dividend, so it's not too harsh to hold it while it's still low. Dividend is around the 5% atm

Negatives:
- Aegon keeps on setting personal goals, that they end up never reaching, year in year out. So it's not really showing any good reflection/prediction skills.
- it's being seen as a value trap, so an undervalued stock that isn't capable of climbing up.
- They broke the support line of €5.02. Which leaves the lower support line at €4.72. And the first resistance is at €5.82 and the second at €7.22. It could really grow quickly if it breaks this resistance IMO.

 

[jesuslives2000]

@helloiamjma Due to the nature of their business do you think they pose a high macroeconomic Risk?

 

[helloiamjma]

@jesuslives2000 That's a good question, but I wouldn't really be able to give you an answer to that. I'd guess the macroeconomic risk wouldn't be that big though.

I think Aegon will probably slowly but surely get back on track, but I would've said the same if you asked me 9 years ago.
Although if you invested in let's say 2010 you would've bought for €4,50,
had a combined dividend of €1.68 as well as a stock price increase of €0.42, so €2.10 profit.

Which isn't a reason to celebrate, as the last 8 years were really good, and it's only a 46,6%. But it's got some potential. I don't own the stock myself, although I'm a fan of Dutch stocks. But I might consider buying some now I'm thinking of it, as I reckon the 2018 figures could do Aegon more good than bad! But I'm just a random stranger on Reddit, so just my $0.02

 

[madisonshpprd]

@helloiamjma It all depends on Season 8

Dragon Glass could be in much higher demand down the road

Otherwise, I'd invest heavily in Wildfire

 

[camilla33]

@jesuslives2000 Debt to equity is not zero from my calculations, I'm getting 0.61 from Morningstar's info.

Anyway, with financial stocks, I usually don't look at Price/Book or Debt to Equity. I make sure that there's not too much short term debt and that there is a good maturity matching for assets and liabilities.

I haven't looked into Aegon N.V's balance sheet enough to comment though.

 

[mcleanch1]

@jesuslives2000 "This firm has a P/C ratio of 1.08 and a P/B ratio of 0.42. whats the catch? Debt to Equity is at 0."

Do you actually like the business or just the valuation at first glance?

"Why is no one talking about this? "

Because you're going to find few people in this sub who have ever heard of it and few (if any) who are interested in investing in an insurance company in the Netherlands.

 

[charlesthomson]

@mcleanch1

who have ever heard of it and few (if any) who are interested in investing in an insurance company in the Netherlands.

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