Qbe

[STRAT]

Hi Yall.
Im with RRR. I wouldnt be buying this one right now.

Theres more than a weak US dollar to the downtrend I think. No direct correlation between the SP and the $US can be seen on the chart ( $US to $AD in green )

[POSSUM THE CAT]

ARBITRAGE check their possible reinsurance liabilities it might shock you.

[Penfold]

I'm with RRR. I don't see any reason the share price will bolt for sometime. But it pays a decent divvie and is a conservative well run company. It makes up 15% of my portfolio.

It is also an analysts nightmare, as its a bit of a black box.

I use it partly as a way to get exposure to the financial sector without buying a bank, as a punt that the us currency will one day recover and as a hedge against a ASX (it tends be a 'safer stock' when things correct).

When you compare it to fellow insurance companies it looks better than most. I find it sad that it didn't get a lot of opportunities to clean up distressed companies post GFC, due to bail outs. I think this was one reason it initially headed south from $24 a year or so ago.

[Arbitrage]

Price seems to be on the rise, for the last week anyway...

[COLIN]

Price seems to be on the rise, for the last week anyway...

I'm not sure what your statement is based on, Arbitrage. QBE is down 1.11% for the past week (ft.com) as compared with a decline of 1.89% for the S&P ASX200, so I suppose you could say it has "outperformed" but I certainly wouldn't be using that comparison as justification for buying! On my reading of the charts I fail to see much semblance of a convincing "buy" signal - except perhaps the Money Flow Index.

[ratkin]

I wouldnt touch them , dont like the ownership structure (nearly all funds) and much of their growth has been by aquisition rather than organic growth, and there are questions about how they can continue this.
Dont trust the brokers , they are connected to the funds who own the stock and always have it as a buy.

Ask yourself , if this stock is so great why does its price keep dropping in a rising market

[Phaedrus]

If this stock is so great why does its price keep dropping in a rising market?

Indeed! What the market thinks of a stock is considered by many to be far more important than anything else. Basic Dow theory states that "the market discounts everything" - in other words, the market reflects every possible knowable factor that affects overall supply and demand. This is of course one of the basic tenets of technical analysis. Dow recognised volume as an important factor in confirming price signals and the QBE chart below provides us with a textbook example of this.

QBE was in a strong but decelerating uptrend and as this progressed, it was possible to draw a series of (green) trendlines which were sequentially broken, giving tentative "sell" signals as marked by small red arrows. You can see that none of these were confirmed by volume (as depicted by the OBV trend) until the last one (Jan 2010).

Similarly, the current downtrend is also decelerating, so again it has been possible to draw a series of (red) trendlines which have each been broken in their turn - but NONE of these tentative "buy" signals (marked by small light green arrows) have been confirmed by volume.

QBE has found some support at around $16.50 but technically it is still in a downtrend. It appears to be establishing a trading range (as bounded by the 2 light blue lines). The Slow Stochastic Oscillator will eventually provide a Buy signal, but this is a fairly conservative indicator and such a signal will most likely be preceded by more active indicators. The magenta line is a Trailing stop and the blue line is a Trailing Short Stop. Trailing stops are often the last indicator to trigger a buy or sell signal.

[Arbitrage]

Thanks Phaedrus.
Despite some of the previous posters comments, QBE went against the market trend last week over a couple of days. At $16.68 it was time to buy as the short term trend seemed to be holding. Looking at your data and hearing about the risks from other posters, I think it is an "Accumulate" at the moment. Latest numbers show it broke through $17 and it will be interesting to watch whether this can be sustained.
If not the dividends will come in handy.

[Arbitrage]

Over $18 today. Seems to be breaking upwards.

[POSSUM THE CAT]

Arbitrage Why when most Australian insurers have the posablity of large exposures to claims for flood damage from present floods