{"id":60025,"date":"2014-09-08T20:35:46","date_gmt":"2014-09-09T00:35:46","guid":{"rendered":"http:\/\/countingpips.com\/?p=60025"},"modified":"2014-09-08T20:35:46","modified_gmt":"2014-09-09T00:35:46","slug":"why-the-insurance-australia-group-ltd-share-price-sank-today","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2014\/09\/why-the-insurance-australia-group-ltd-share-price-sank-today\/","title":{"rendered":"Why the Insurance Australia Group Ltd Share Price Sank Today"},"content":{"rendered":"
September 8, 2014<\/div>
\r\n<\/div><\/div>

By MoneyMorning.com.au<\/u><\/a><\/p>\n

What Happened to Insurance Australia Group Ltd\u2019s Share Price?<\/h2>\n

Shares in the nation\u2019s largest insurer to small and medium businesses Insurance Australia Group Ltd [ASX:IAG] <\/strong>took a beating today, with the stock shedding nearly 5% of its value. Today\u2019s price action trimmed IAG\u2019s year-to-date capital growth to less than 6%.<\/p>\n

Why Did This Happen to Insurance Australia Group Shares?<\/h2>\n

Today IAG<\/strong> traded \u2018ex-dividend\u2019. That means that if you wanted to get your hands on the 26 cent franked dividend that the company will pay out in a few weeks, you needed to hold the shares as of Friday afternoon.<\/p>\n

A company\u2019s stock price usually drops by the value of its dividend on the ex-dividend date\u2026give or take a few cents. That\u2019s why market observers expected IAG shares to go down by around 26 cents today. So why did IAG drop by as much as 38 cents during the day?<\/p>\n

This looks like a classic case of yield-hungry investors bidding a share price up by an abnormal amount in the weeks leading up to its ex-dividend date\u2026only to sell their shares as soon as they\u2019ve qualified to receive the dividend. <\/p>\n

That\u2019s what I see when I look at the price action between the company\u2019s solid full-year result in mid-August and today.<\/p>

\r\n
\r\n

Free Reports:<\/p><\/div>\r\n

\r\n

<\/a>\r\n\t Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p>

\r\n
\r\n
\r\n

<\/a>\r\n\t Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p>

\r\n<\/div>\r\n

\r\n
<\/div>\n

Every stock attracts investors with a different mix of preferences and styles, and that mix can change over time. It looks like IAG just got a little too heavy with income-focused investors over the past few weeks.<\/p>\n

What Now for Insurance Australia Group Ltd?<\/h2>\n

IAG remains one of Australia\u2019s strongest insurance groups. Its brands, which include CGU and NRMA, are successful\u2026and the company\u2019s profit margins on insurance premiums are hitting record highs. <\/p>\n

While some investors seem to view this as \u2018as good as it gets\u2019, and a reason to sell the stock\u2026today\u2019s larger-than expected pullback could represent an opportunity to buy into a good operator at a more reasonable price.<\/p>\n

Cheers, Tim Dohrmann<\/strong>+<\/strong><\/a>
\nSmall-Cap Analyst, Australian Small-Cap Investigator<\/em><\/strong>
\nJoin Money Morning on Google+ <\/span><\/a><\/strong><\/p>\n

The post Why the Insurance Australia Group Ltd Share Price Sank Today<\/a> appeared first on Stock Market News, Finance and Investments | Money Morning Australia<\/a>.<\/p>\n

\n<\/img><\/a> <\/img><\/a> <\/img><\/a>\n<\/div>\n


\nBy MoneyMorning.com.au<\/u><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By MoneyMorning.com.au What Happened to Insurance Australia Group Ltd\u2019s Share Price? Shares in the nation\u2019s largest insurer to small and medium businesses Insurance Australia Group Ltd [ASX:IAG] took a beating today, with the stock shedding nearly 5% of its value. Today\u2019s price action trimmed IAG\u2019s year-to-date capital growth to less than 6%. Why Did This […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-60025","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/60025","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=60025"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/60025\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=60025"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=60025"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=60025"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}