With the pandemic and recent wars around Europe, insurance companies have been in focus for a couple of years already. Accordingly, a French multi-line insurance company AXA was the topic of one of Obermatt’s recent Coffee Break Stock Chats, and our guest investors decided to add it to the Obermatt Europe Value Wikifolio.
If individual stocks purchases aren't for you, take a look at the financial product traded on the SIX stock exchange: Obermatt Swiss Pearls Index ETP. It's made up of the 36 best performing Swiss stocks based solely on Obermatt's 360° View.
PRO: These three points speak for a buy:
- Unstable geopolitical situations usually help insurance companies raise their premiums and profits.
- Mostly green Obermatt Ranks. AXA’s 360° View is at 75, which means that the company’s overall performance is better than 75% of its competitors. The Value Rank is at 67. Also, investing in insurance companies generally helps reduce the risks of entire stock portfolios, as these companies don’t follow the performance of the entire stock market.
- AXA and Allianz shared the top 2 leading spots in size of gross written premium volume in Europe for the last couple of years.
CONTRA: These three points argue against it:
- Even though unstable geopolitics help insurance companies, growth shouldn’t be indefinite. Fluctuations in the insurance business make these companies less interesting for some investors.
- A yellow Growth Rank of 37 is due to somewhat lower capital and profits growth. Stock returns are at 61, though.
- Their Opinions Change rank is at 48, meaning that some of the analysts covering the company have recently changed their recommendation for investment in AXA for the worse.
Taking current analysis into account, we do believe AXA is a good investment and we add it to the Obermatt Europe Value Wikifolio.
If you want to be part of the shaping of our portfolios, join the free Coffee Break Stock Chats with the creator of the Obermatt Method Dr. Hermann J. Stern and other guest investors. You can share your ideas, discuss the stocks and learn about stock investing in the process.