Breaking News
Home / Business / Has the Challenger share price bottomed out?

Has the Challenger share price bottomed out?



Challenger Ltd (ASX: CGF) shares currently for $ 7.46 per share after falling 21% since the start of the year.

So what caused the Challenger stock price to tumble in 2019 and is it time to buy Challenger shares on the cheap?

Why the Challenger share price has fallen in 2019

The Challenger stock price had a soft ending in 201

8, mainly due to significant losses on the investment portfolio as world market volatility hurt the asset manager's return on 2H 2018. [19659004] The bad news continued for shareholders in January this year when Challenger announced a mid-January earnings forecast, slashing its pre-tax profit guidance to between $ 545 million and $ 565 million, compared to $ 547.3 million booked in FY18.

While this may not look so bad on the surface, it followed Challenger's positive outlook in November 2018, which predicted profit growth before tax 8% to 12%, and investors set the rate for the exit.

This was reinforced by the Challenger announcing a 97% fall in its first half net profit after tax for 1H 2019, and it is easy to see why the Challenger share price has so far this year.

What is the outlook for 2020?

Fast forward to August, and the Challenger share price rose 10% on a day when the Aussie annuity provider reported a 1% increase in assets under management to $ 81.8. billion and a net profit of $ 308 million.

On a positive note, Challenger still has a strong balance despite its return on investment over the last 12 to 18 months, but I am not sure that the Challenger share price has reached its turning point yet.

Whil The obvious upside to the Challenger is the potential growth of the Aussie superannuation system and the trillions of dollars of assets offered, there are potential headwinds as well.

Challenger & # 39; s annuity business is dominant in the sector, but may soon face increased competition and subsequent margin compression, further lowering investment returns.

Another challenge I see is that the low interest rate environment in 2019 and 2020 also does not contribute to interest rate sales, with investors looking for higher returns.

If you & # 39; These 3 ASX dividend stocks are one of those fools and are a great place to start hitting low interest rates this year.

NEW! Top 3 Dividend Stakes for 2019

With interest rates likely to remain at the bottom for several months (or YEARS), income-minded investors have nowhere to turn … except for dividend stocks. That is why The Motley Fool's top analysts have just prepared a brand new report, posting their 3 best dividend efforts for 2019.

Tip: These are 3 stocks you probably have never come across before.

They are not the banks. Not Woolies or Wesfarmers or any of the "usual suspects."

We believe these 3 stocks offer solid growth prospects over the next 12 months. Each of these three companies boasts of fully franked returns and can be a good fit for your diversified portfolio. You will discover all three names and codes in "The Motley Fool's Top 3 Dividend Shares for 2019."

Even better, your copy is free when you click the link below. Fair warning: This report is brand new and may not be available forever. Click the link below to be among the first investors to access this timely, important new research!

The names of these top 3 dividend stakes are all included. But you have to hurry. Depending on demand – and how fast the stock prices of these companies are moving – we may be forced to remove this report.

Click here to claim your free copy right now!


Motley Fool contributor Kenneth Hall has no position in any of the shares listed. Motley Fool Australia owns shares in and has recommended Challenger Limited. We Fools may not all have the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains only general investment advice (under AFSL 400691). Authorized by Scott Phillips.


Source link

About admin

Check Also

Why it is not a bubble in real technology company assessments

The argument seems to increase, both locally and internationally, that VC-backed, privately owned technology companies ...

Read moreWhy it is not a bubble in real technology company assessments