Shareholders in QBE Insurance Group Ltd (ASX: QBE) have had a rollercoaster year. The company started the year by announcing yet another poor performance but set seemingly realistic targets that rapidly pushed the share price from $10.05 to over $13.
QBE then announced that those targets were unlikely to be met and initiated a program to fix the group's capital position to shore up reserves and provide stability. The share price has subsequently bounced between $10.50 and $12 for most of the year, but has plunged back towards $10 again in the recent sell-off.
12-Month Low
QBE's 12-month low of $10.05 was very nearly hit on Wednesday when the share price fell over 2% to $10.20. A big bounce on Thursday pushed it back towards $11, but could this be the time to buy a company on the road to recovery?
Capital Initiatives
QBE has launched a range of capital initiatives designed to boost balance sheet resilience and give the group more flexibility. An oversubscribed equity raising was completed in September, a $700m debt issue was completed last week, and asset sales are planned for 2015.
The sale of the group's US agency businesses and Central & Eastern European operations is planned for the near future. It will: "Deliver significant additional cash and capital resources that will substantially improve the Group's financial flexibility and ability to better withstand a reasonable range of downside scenarios".
Predictions of Better Times
QBE has been a basket case for years. Long-term investors have suffered through equity raisings, huge cuts to the dividend payout and a plunging share price, however the tide may be turning. Prominent analysts are predicting up to a 30% increase in net profit for the 2015 financial year and a corresponding 30% increase in dividend payout to levels not seen since 2011.
Foolish investors could be massively rewarded by holding on for the long term, however next year's yield will still likely only be around the 5% mark.
