South African-owned insurance business Youi is being touted as a possible initial public offer (IPO) contender following the extremely successful float of Medibank Private Ltd (ASX: MPL) late last year.
As has been reported by the Fairfax press, some bankers have approached Youi's current owner, Rand Merchant Holdings Group, regarding a potential listing on the Australian Securities Exchange. While Rand Merchant would likely maintain a significant stake in the business should it follow that course, it would also give it the opportunity to capitalise on the market's raging appetite for insurance stocks.
For instance, in November last year, Medibank Private was listed on the ASX by the Australian government to the tune of $5.7 billion. The float was heavily oversubscribed (with some 750,000 investors registering their interest prior to the IPO) and the stock has surged 24%, heavily outpacing the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) during that time. It's now trading on a forecast 25.6x price-earnings ratio, with a market capitalisation of more than $6.6 billion.
Of course, Medibank Private isn't the only insurer to have floated its shares on the market recently with others including Cover-More Group Ltd (ASX: CVO) and Genworth Mortgage Insurance Australia (ASX: GMA) having both listed in the last 18 months.
Youi has been operating in Australia since 2008 with products currently including Vehicle, Home, Watercraft and Business Liability insurance and could make for a popular prospect amongst investors should an IPO be pursued. In the meantime, there are plenty of compelling investment opportunities that are worth your attention, including the company our top analyst just named his hands-down favourite stock for 2015.
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