1)An end to hurricane season is upon us. This summer is the season for low Allstate share prices.
2)New 52 week lows for short covering before dividend payment becomes due for shorts to pay if they hold.
3)Industry-wide rate hikes.
4)The possibility of some European Band-Aid that has lifted financials.
There is nothing special that can be said about the performance of Allstate as an individual company. Anything can happen here to the up or down side. The price has been so low for acquiring shares under $23, that a sell off can occur at a seemignly ridiculously low price at any unexpected time. Just as well, we know that coming from $under $23 can cause a stronger short squeeze since it can seem possible that all of the four things above may all occur at once.
Those that got greedy and waited for the extra fat money last May and did not take profits, watched the price go down.
The price is too high to buy and too low to sell here IMO.
Between now and early May, find your price and gradually.... Sell
You are super correct that none of this is due to Allstate doing anything special. Their 3rd quarter numbers are sure to disappoint. One thing that I have not heard enough about from people, is the fact that Allstate is having a hard time finding places to invest their money to get a good return. That seems to be out of the equation. As they have maturing bonds and principal repayments, there are not good income producing places to put that cash (or premium dollars). Bottom line, Allstate is struggling on the investment side of the equation. Reinvestment risk. The share price will be lower soon enough.
Third Quarter will not buoy the share price and Management Changes have done little except shuffle the deck chairs on the Titanic. The only thing this Management Group leads the industry in at this time is their ineptness. They have failed with their internal sales operation, alienated their main asset, the Agency Producer Group, and esurance will not be a good parallel platform to secure sales from the frequent and expensive shoppers on the internet because their lack of profitability will drive those prices upward and All is quick to increase rates because they do not have a good handle on quality.
Their Legal attempt to recover bad investment monies from the CDS scandal will fall on deft ears in the court systems because they are considered to be "Investors with Knowledge" and Wilson and Liddy will ultimately be found guilty of mismanagement of the investment portfolio due to Liddy's connections with Goldman Sachs as a BOD member.
Agency turnover will be the major problem moving forward as many of the experienced long term producers are bailing out and moving on the the Independent Agency Arena, leaving TC (Their Current Grand Plan) with fewer producers and folks with a true lack of knowledge of product, people, and personal relationships that truly cement customer loyalty.
Change the Management and a New Horizon will appear and this Cash Cow will move from the rocky slopes it has grazed on for the past 10 years and flourish again.
This stock is faltering in market rallies while Wilson claims pro-active investments played a vital role in the $0.16 number for Q3. Wilson expects us to believe Allstate's hitting homeruns while Atlantis has been sinking and Rome has been burning as the Greeks fiddle, and financials have been especially hard hit in an extremely bad 3rd quarter for the market.
Did you read the S&P credit stability downward revision with a future credit downgrade watch issued on Nov 2, 2011?
Did you read the S&P dividend strength (or lack of stregth) opinions report and estimated revisions issued on Nov 3, 2011?
Where do you see the Allstate price on November's Ex-date?