At this time of year, many investors like to talk about which stock they think will perform best over the coming 12 months.
As a general rule I’m not a huge fan of cheerleading individual companies, especially over the short-term, but this year I thought I’d join in and write about Admiral Group, the UK’s leading car insurer, for the January issue of Master Investor magazine.
Let me be clear: I’m not in love with Admiral, but if I had to pick a favourite investment then Admiral would be it.
There are lots of reasons why, such as the fact that Admiral has produced consistent growth and average total shareholder returns of almost 16% per year since I first invested in 2013.
But that’s all in the past, and in investing it’s the future that counts.
And on that front, I think Admiral is probably more attractively positioned and more attractively valued today than it was when I became a shareholder.
What is your opinion of Chesnara? I have done well with it and Admiral too but I don’t really know why I am holding Chesnara and if he only reason I am holding something is its going up that worries me.
Hi Andrew, Chesnara is actually one of my holdings (personal and UKVI model portfolio), so obviously I like it but not as much as Admiral.
It mostly takes on books of pension or life insurance business which are in run-off, i.e. closed to new entrants. The idea is to buy them at a discount from companies that don’t want the hassle of running life insurance or pension books anymore, and then run them more efficiently to extract profit while satisfying its obligation to policyholders.
Its run by actuaries so hopefully they know what their doing, and the aim is to produce a steadily growing dividend for income-focused shareholders. They’ve achieved that so far, so I’m happy to continue holding.