Why this fund manager is bullish on the Suncorp (ASX:SUN) share price

Insurance is “one of the few sectors left getting earnings upgrades.”

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The Suncorp Group Ltd (ASX: SUN) share price is in the red today, down 0.7% to $12.68 per share.

The S&P/ASX 200 Index (ASX: XJO), meanwhile, is shaking off its 3-day losing streak and currently up 1%.

But don’t place too much weight on a single day’s price action. Over the past 12 months, 6 months, and 1-month the Suncorp share price has handily beaten the returns from the ASX 200.

We’ll take a brief look at how the insurance and financial services company has performed below. But first…

Why this fund manager is bullish on the Suncorp share price

Earlier this month, The Motley Fool interviewed Andrew Martin – principal portfolio manager of the Alphinity Australian Share Fund and Alphinity Concentrated Australian Share Fund.

(You can find the full interview here.)

Martin told us that his funds focus on companies that are getting consistent earnings upgrades.

That means he typically concentrates on individual shares rather than looking at things from a broader sector viewpoint.

However, he added, “One of the few sectors left getting earnings upgrades is insurance.”

The insurance industry is experiencing some of the best conditions since the early 2000s, Martin told us. “A much better pricing environment coming through is helping grow the top line, and then you get this expansion in margin.”

Suncorp was one of the companies Martin was bullish on.

After experiencing some issues in recent years, he said:

There’s a bit of a turnaround happening that’s just starting to bite. And it also gets a bit of benefit from COVID lockdowns. When fewer people drive their cars, fewer people crash. And when more people are at home, fewer houses get burgled.

Suncorp snapshot

As mentioned up top, the Suncorp share price has significantly outperformed the ASX 200 over the past year. Suncorp’s shares are up 43% in 12 months compared to a 19% gain on the ASX 200.

Year-to-date, Suncorp is up 28%.

The company pays a 5.2% trailing dividend yield, fully franked.

At the current Suncorp share price, the company has a market cap of approximately $16.2 billion.

Should you invest $1,000 in Suncorp right now?

Before you consider Suncorp, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Suncorp wasn't one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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