Are Direct Line shares worth buying ?

Biggles

I'm in (my broker is Barclays). Allocation should be known next Thu.

Biggles

Glen_Clark wrote: »

are you sure?
I got a much cheaper quote for my insurance from Churchill than GoCompare, I asked their salesman why they don't do Churchill and he said he didn't know.

Different comparison sites cover different companies, you have to check them all to get the fullest coverage. I just got my home insurance with Churchill through Confused.

C_Mababejive

gkerr4 wrote: »

love it! - any specific reason? or just not keen?

I think they are too high risk in what is a very competitive market. For me to invest in individual shares in the current climate they have to be defensives i.e energy,utilities etc..other than that,its funds..

I might be tempted if the price drops enough after the IPO.

Glen_Clark

Biggles wrote: »

I just got my home insurance with Churchill through Confused.

How does the premium compare with going direct to Churchill through their website?
(Mine was vehicle insurance. I have always dealt direct with the insurance company because I thought it would be simpler in the event of a claim - talking to the engine driver instead of his monkey etc.But I have never made an insurance claim in my life so I can't be sure of this.)

grey_gym_sock

Glen_Clark wrote: »

'In fact, depending on demand, the number of shares that RBS makes available to retail buyers could be very few. But this is where it gets tricky because if allocations for retail investors suddenly rise, it could be as a result of institutional investors turning up their noses.'

that's quite a good reason to leave the initial issue alone.

i'm not sufficiently tempted.

it doesn't seem obviously cheap compared to RSA etc. dodgy practices by car insurers generally, which might (or might not) get reigned in, reducing profits. the improved profitability in the last year or so can't be relied on to continue: these things tend to go in cycles.

there's also lots of opportunity for things to go wrong, or temporary panics, over the next 2 years before RBS has sold off the rest of its stake, so a good chance the shares will be cheaper later on.

clearly, the business throws off heaps of cash, and is pretty recession-proof - ppl can't cut out the car insurance (unless they get rid of the car - which would be an extreme measure for most drivers). so i'm not too bothered about it being mostly the UK. but it all depends on market share and margins in the UK.

bigfreddiel

look, no one knows how this is going to go - just look at facebook

my advice - for free - if you can afford to lose go for it - if not - don't

glad to help

fj

Ifts

I'm still undecided if a little punt on these will be worth it......

- I cant help wondering if DL was such a good investment then why didn't it get snapped up by a competitor back in 2007/8 although the price tag then was £7 billion plus (think i got the date/figure correct).

- RSA and Aviva are also offering good dividends (Aviva holding risky Italian sovereign bond holdings, although they have recently sold just under €2 billion they still hold plenty of distressed Italian government debt).

- If this first batch of shares go mainly to private investors, then if bad news or other events between now and the remaining shares being sold pushes the share price well below the IPO price, leaving a bad taste for private investors, if this was to happen and RBS end up off loading the remaining shares in DL to a private equity company (who are sitting on many billions of surplus cash they need to spend or return to investors), could a private equity company force the private investors (who are buying in this first part of the sale) to sell their shares below the IPO price to take the company private again?

Or maybe just buy into the float, hoping it will rise and get out quick (could be risky?).
I have been wrong many times before so as always DYOH. I remember buying Carphone Warehouse shares when they floated for £2, they went below £1, I held on to them for a while and eventually sold for over £3.

Saying that if I refrain from buying into this DL IPO the price will probably shoot up (its always the way)!

Anyway best of fortune to those that have decided to go for it, hope it works out for you and you are :j

Browntrout_2

Going for a quick punt this morning closes at noon.

Biggles

I haven't heard yet whether they're oversubscribed, but brokers were 'reporting strong interest'.

http://www.standard.co.uk/business/business-news/punters-steer-for-direct-line-despite-the-concerns-8203806.html

sabretoothtigger

If an IPO has no interest, the backers must hold all the shares. Its their job to make sure there is strong interest

RBS is similar to facebook in that they will sell many times over a year not just the IPO. I think this make an initial rush of value unlikely, if the FTSE were near 5000 this might be a great way to take a bet on it rising but we already did that !