Stock Spotlight - Suncorp (SUN)

This week I am going against the trend, Suncorp (SUN) has been sold down on the back of concerns over insurance claims due to storms in Sydney. This is within the normal business cycle for the company, there was also a rumour SUN was going to do a share buy back and now a new rumour they won’t do the buy back due to the above insurance claims.

The facts are the stock is looking oversold and is currently trading at $16.64 and paying 6.3% fully franked dividend. Grossed up this is a 9% return on a blue chip stock. Our price target is also 20% above the current price. So unless you think SUN is about to fold I think that this is great long term stock. I would look to BUY now and hold for the dividend until the latest storm blows over.