NN: Biggest daily H&S ever and €250 million new share buyback.
After posting a more than 14% drop in 2022 operating profit (1.74bn), missing market estimates of 1.84 bn, and even though its operating capital generation (OCG) jumped 8% to 1.71 billion euros last year mainly thanks to higher interest rates and a strong business performance of the Netherlands Life and Insurance Europe segments; the company is shaping the biggest H&S pattern I have ever witnessed in a stock.
Besides, NN also announced a new share buyback programme of 250 million euros. Will they implode due to share buybacks that will materialise into negative returns in the near future?
At this pace, all those companies doing share buybacks will be the most damnified of the market due to an increased own capital at the wrong time. And it is a pity because this company has really attractive fundamentals, but after the operating profit miss in 2022 and the imminent recession all media is talking about, it is currently very risky to invest in it. But I will keep it in the radar as 35.6€ is the first support while 45€ is the first resistance.
Besides, NN also announced a new share buyback programme of 250 million euros. Will they implode due to share buybacks that will materialise into negative returns in the near future?
At this pace, all those companies doing share buybacks will be the most damnified of the market due to an increased own capital at the wrong time. And it is a pity because this company has really attractive fundamentals, but after the operating profit miss in 2022 and the imminent recession all media is talking about, it is currently very risky to invest in it. But I will keep it in the radar as 35.6€ is the first support while 45€ is the first resistance.
Comment:
It is true though that in the short term, the company might go up to 41.63€ in an attempt to cancel the H&S pattern which would be to pass 41.70 and 42 in a calmed manner. That could annihilate the H&S prophecy and NN could keep going up depending on investors' expectations of future profits. One thing is for sure: A high interest rates environment had a positive impact on OCG.