PRU LN

Prudential PLC

Finance/Real Estate, Event Driven/Special Sit


Presented:05/03/2021
Price:£15.35
Cap:$61.40B
Current Price:£6.62
Cap:$27.23B

Presented

Date05/03/2021
Price£15.35
Market Cap$61.40B
Ent Value$65.37B
P/E Ratio24.36x
Book Value£5.88
Div Yield0.27%
Shares O/S2,604.40M
Ave Daily Vol4,531,770
Short IntN/A

Current

Price£6.62
Market Cap$27.23B
Prudential Plc is a holding company, which engages in the provision of insurance and financial services. It operates through the Asia and U.S. geographical segments. The Asia segment consists of health and protection, other life insurance, mutual funds, selected personal lines property and casualty insurance, group insurance, and institutional fund management. The U.S. segment includes fixed annuities, fixed index annuities, variable annuities (VA), and institutional product offerings. The company was founded on May 30, 1848 and is headquartered in London, the United Kingdom.

Publicly traded companies mentioned herein: AIA Group Ltd (1299 HK), Prudential PLC (PRU LN)

Highlights

The presenter is long shares of Prudential PLC (PRU LN), a company he has been following since 2019. At the time, PRU was a UK-based business that had European, US, and Asian life insurance businesses. The Asian business had been experiencing strong growth, whereas the European and US assets were ex-growth, capital intensive, and were facing the same issues as most mature life insurance businesses in that reinvestment opportunities were slim given the rate environment. PRU decided to spin-off its European business in 2019 but surprisingly did not also spin-off its US business. The presenter believes this was partially due to complexity issues, as well as CEO Michael Wells’s connection to the US business (he led the US business prior to becoming the group’s CEO). Today, the presenter remains bullish on the Asian business and sees an attractive setup since the US business will be spun-off by the end of this quarter, creating a pure-play Asia business and generating interest from Asian investors. PRU currently trades at ~GBp1500 per share, whereas he sees a fair value in the low GBp2000 range that can compound over the coming years.

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