Are Direct Line shares worth buying ?

coastline

With stockmarkets on the rise...and maybe all time highs soon ??...chances are they will be priced in line with similar stocks regarding P/E values....so no discounts.
I read at the weekend they aim to pay out 40-50% of profits in dividends...
A good brand name...so they should do ok...

sabretoothtigger

Is it 30 PE I think I read

Lokolo

Glen_Clark wrote: »

So do comparison websites, plus the extra administration of dealing through somebody else, with a hefty mark up on top. Dragon Peter Jones has made a fortune from comparison websites. Who do you think that has come from?

Yes but thats only because you still go to them direct.

Before comparison websites I would go to numerous providers, fill in my details and then get all the quotes and go for the best one.

Why would I continue doing that when all I need to do is wait for my yearly GoCompare email saying "Do you want to find out the cheapest provider?" I click yes, it gets all my saved details and gets all the quotes (and assumes I have +1 NCB).

Why on earth would I bother with DirectLine anymore?

I used them for 2 years, then went to GoCompare and for the next 3 years, I compared to DirectLine and DL were never cheaper. So now I don't even bother checking.

And there is not a hefty markup, yes there will be some markup, but hefty? The reason they've made so much money from it is because of the huge user base and cheap administration.

1jacks64

So now the details have been released is anyone going for this ? The papers are saying it could be worth a nibble. The papers are also saying that they cannot see much growth in such a competitive market and with a Competition Commission investigation beginning. What are others take on this ?

sabretoothtigger

http://www.telegraph.co.uk/finance/markets/questor/9575810/Questor-share-tip-Buy-a-small-position-in-Direct-Line-float.html

Gromitt

Lokolo wrote: »

Yes but thats only because you still go to them direct.

It used to be that going to the website direct was either the same price or more, now it seems like you get the best deals by going direct. I still use comparison websites to generate a short list, then view all the policy documents to see who gets the top 5, but then I visit them in turn, fill in my details and see whose cheapest. This year I got it £25 cheaper than the comparison website (£75 if the cashback works out) and with less excess. I'd never buy through the comparison website. Cashback site, yes (if its the same policy, you have to check carefully!), but not a comparison site.

Blackdog

Gromitt wrote: »

It used to be that going to the website direct was either the same price or more, now it seems like you get the best deals by going direct. I still use comparison websites to generate a short list, then view all the policy documents to see who gets the top 5, but then I visit them in turn, fill in my details and see whose cheapest. This year I got it £25 cheaper than the comparison website (£75 if the cashback works out) and with less excess. I'd never buy through the comparison website. Cashback site, yes (if its the same policy, you have to check carefully!), but not a comparison site.

Can't agree with you more, a bit of effort then a visit to a cashback site often comes out best.

Going back to the share offering I will be waiting to see what happens to the share price for a few weeks before deciding to but.

TDM850

The indicated range between 160-195p is thought by many analysts to undervalue the business, especially in comparison to its listed peers - RSA Insurance and Admiral. It's a subjective thing I know, but insurance is a necessary / mandatory for all of us, and Direct Line built the brand and name on discounting and undercutting its competitors on price. More info on the float and how to participate can be found here

Reaper

TDM850 wrote: »

The indicated range between 160-195p is thought by many analysts to undervalue the business

It's worth checking who these "many analysts" are. The newspaper reports I have seen pushing this point of view mention: "research produced by the banks advising RBS and Direct Line on the deal" - so hardly impartial!

Direct Line depend heavily on motor insurance and the current Competition Enquiry into the way motor insurers are inflating the cost of replacement car hire and repairs is I think the main reason for the lower price. If you think the market is not functioning properly (a view I share) then you can expect the Commission to end or at least limit the gravy train that is pushing premiums so high and in doing so hit the profits of motor insurers. So I don't think the shares will be underpriced, but let's see what the final floatation price is before making up our minds.

TDM850

Good point Reaper, but in my view HM Govt are v keen to ensure this float is a success as it will have a v positive effect on the stock market, investor confidence and the economy in general.

I for one don't believe in coincidence - the fact this 'enquiry' (which don't get me wrong, is v much needed) was introduced just as Direct Line / RBS might have been considering upping the indicated range and value says to me that they want to keep the offer price down, which should ensure the float gets away and make a profit for all who take part.