Is it time to dump QBE shares?

Why, oh why QBE Insurance Group Ltd (ASX: QBE)?

Why do I believe your forecasts?

Why do I never learn from (my) past mistakes?

Why should I continue to invest in you?

Psychologists may say this is a strange conversation to be having with myself, but I think that the regularity it happens implies that there’s something more sinister at play than just me occasionally losing my marbles.

Here are some of the recent ups and downs from of the ASX’s most recognisable blue-chip stocks:

Why the QBE Insurance Group Ltd share price is sinking

$1 billion buyback: Why the QBE Insurance Group Ltd share price is rocketing today

Are QBE Insurance Group Ltd (QBE) shares safe in 2017?

The QBE Insurance Group Ltd share price is going nuts on takeover rumours

Why I dumped my QBE Insurance Ltd shares

Last month I reported on what analysts expect for the current financial year; namely they expect that QBE will report half-year results that put it in on target to hit full year results of:

  • Net profit of $818m (down from $844m in 2016)
  • Earnings per share of 61 cents (down from 64 cents)
  • Dividend per share of 44 cents (down from 40 cents)

So yesterday when QBE released their trading update in anticipation of official results in August, I expected the worst, but my emotions, hardened by at least 5 years of QBE’s patchy-at-best record of achieving its own estimates, gave me a false sense of optimism that it could be ‘good’ news.

It was bad news, and while it shouldn’t make a massive dent in those numbers above, it was certainly enough for many investors to sell.

Is it time to dump QBE shares?

I still hold my QBE shares but I’m really struggling to remember why. 2 years ago we thought we would get massive dividends, 1 year ago we were hoped for stability and today we still seem a long way from both.

The good thing about QBE is that it’s going to be tough to kill off and the share price will probably recover back to $13 in the next few months (barring a shocking August report). So I may hold out till then and consider buying a blue chip that will love me like I love it.

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Motley Fool contributor Andrew Mudie owns shares of QBE Insurance Group Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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