Challenger recommendation

You have previously recommended Challenger for both its strong position in the annuities market for the future and its relatively high dividend yield.
I previously bought at around $10.80. With its recent decline now to $6.50 per share, would you recommend buying some more, particularly with dividend yield now around 5.5%?

A: I got Challenger wrong and cut if from our growth portfolio at the end of May. I feel a little burnt. Clearly, the market also got it wrong, not seeing the impact of ultra-low interest rates and the Royal Commission on annuity sales by planners.


I am loathe to give you an opinion.


As for the market, according to FN Arena, there is 1 buy recommendation, 6 neutral recommendations, and 1 sell recommendation. The consensus target price is $7.27,  about 12% higher than the current market price. The broker range is a low of $6.52 to a high of $8.80. Mike McCarthy wrote positively about Challenger in yesterday’s Switzer Report.

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