- Know when a sprint in performance is done
- Watch for the next pull-backs
Both our stocks this week have seen exceptional performance over the last year or so but each has moved from looking oversold to being fully valued. Although there are still positive stories for these businesses investors should watch out for much better value, which is highly possibly as both have had a volatile share price history.
Sabre Insurance (SBRE) – this specialist motor insurance business has been a strong performer with sharply improving performance ratios in the last year or so driving a doubling of the share price. Sabre was oversold 15 months ago but today the valuation now looks to be about right. There is still an above average yield on offer but the share price needs to imply it's likely to make a higher total shareholder (TSR) going forward that is commensurate with the risk inherent in insurance stocks.
