The Suncorp Group Ltd (ASX: SUN) share price fell 6% to $13.63 this morning, after the company released its full year results. Here’s what you need to know:
- Revenues rose 12% to $17.4 billion
- Profit rose 4% to $1.07 billion
- Dividends of 73 cents up from 68 cents previously
- Insurance gross written premium (GWP) up by 4%
- Cash return on equity (ROE) of 8.4% (up from 8.2%)
- Net tangible assets of $6.20 per share
- To invest $100 million in the ‘Marketplace’ strategy; dividends were maintained by lifting payout ratio
Suncorp is approximately half insurer and half bank, although thanks to lower claim costs this year, the insurance division delivered nearly 2/3rds of overall profits. The core Australian insurance division was a very strong performer, with respectable premium growth and lower losses which lead to a significant increase in profits.
New Zealand was more subdued, due to the impact of the Kaikoura earthquake and the ongoing Canterbury insurance claims. Suncorp also had its bid for NZ minnow Tower Limited (Australia) (ASX: TWR) rejected by the NZ competition regulator.
In the banking division, business was more ordinary. Net interest margins (NIMs; the ‘spread’ between what is paid for funds and the rate the bank loans money at) came in at 1.83%, down from 1.86% previously. Impairments (losses on loans) also fell from 0.03% to 0.01%, a phenomenally low level. By contrast, this was 0.09% in 2012, 1.28% in 2009, and 0.26% in 2006. Surprisingly, net interest margins have remained relatively constant since 2009, despite plunging interest rates.
Overall, the bias in prices is: Downwards.
Short term: Prices are moving.
Intermediate term: Prices are ranging.
Note: this chart shows extraordinary price action to the downside.
The projected upper bound is: 14.32.
The projected lower bound is: 13.02.
The projected closing price is: 13.67.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 white candles.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 18.7050. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a buy 7 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 34.59. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 59 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -208.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 7 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 13 period(s) ago.
Rex Takasugi – TD Profile
SUNCORP FPO closed up 0.110 at 13.680. Volume was 57% above average (neutral) and Bollinger Bands were 63% wider than normal.
Open High Low Close Volume
13.600 13.790 13.470 13.680 6,284,317
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 14.25 14.49 13.52
Volatility: 43 29 23
Volume: 5,485,863 4,256,366 3,517,379
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
SUNCORP FPO is currently 1.2% above its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of SUN.AX at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on SUN.AX and have had this outlook for the last 9 periods.
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