Three reasons to like Challenger (ASX:CGF)
Three reasons to like Challenger (ASX:CGF). Alex Leyland from Leyland Private AM has been buying Challenger since it was $3.50. The stock has nearly doubled during this three year period, however, Alex says he is continuing to buy Challenger at current prices giving three reasons for his thinking. 1) Challenger is currently trading on a PE multiple of about 10 times, which is inexpensive relative to the market and other businesses in the sector (such as banks). 2) The Company has low debt levels and their annuity business, which makes up 90% of their earnings and is growing 10% annually, gives great exposure to the growing pool of superannuation money. 3) Challenger has first mover advantage in the annuity market and as a result has established a dominant market position. With retirees seeking out predictable returns Leyland says Challenger will continue to find it's way into his client portfolios.