Our opinion on the current state of OMU

Old Mutual (OMU) is a premium African financial services group that offers a broad spectrum of financial solutions to retail and corporate customers across key market segments in seventeen countries. Old Mutual's primary operations are in South Africa and the rest of Africa, and it has niche businesses in Latin America and Asia. This company is what is left after Quilter, Brightsphere and most of Nedbank, were unbundled from the original Old Mutual Plc which was listed on the London Stock Exchange. Some estimates indicate that Old Mutual is about 30% below the company's embedded value. Currently, the company has about R1,one trillion under management. A large part of its loss in the period was the R8bn write-down in its investment in Nedbank which is now recovering. The company is unbundled 62m Nedbank shares into the hands of shareholders worth about R10,4bn in the ratio of 1,32 Nedbank shares for every one hundred Old Mutual shares held. Obviously, insurers like OMU are vulnerable to the impact of the pandemic and the company announced a R2bn increase in its provisions in this regard. In its financials for the six months to 30th June 2023 the company reported headline earnings per share (HEPS) down 8% and group equity value (net asset value) up up 3% at 1880,6c per share. The value of new business rose by 2,6% and gross written premiums increased by 17%. The company said, "Sales grew by 14% across our segments driven by improved productivity levels, which contributed to strong growth in value of new business". On a PE of 9,37 and a dividend yield (DY) of 5,02, we see this blue-chip share as relatively cheap now. Technically, the share has been falling since October 2021. Our advice was to wait for a clear break above the downward trendline - which came on 10th November 2022 at 1097c. Since then the share has moved up to 1210c.

Top 3 & 4 companies on our winning shares list.
Snapshot: 4/2024

#3 - MIXTEL- MIX- Added 2023-12-28 - 86.44% Gain since added
#4 - HARMONY - HAR- Added 2023-11-16 - 70.15% Gain since added

Full list available to PDSnet subscribers only.

The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.