Greyinvestor
03 Mar 2015
Valuations On hols at the moment, and have posted on the AML board. Didn't expect any chat on LRE......There is a lot going on in this sector at the moment:CGL takeoverBRIT takeoverReinsurance rates falling through the floorLittle growthGood results from HSX, weak results from AML.All of this leads to lots of froth and mispricing, in my opinion. The cash coming out of CGL and BRIT has messed up prices.I've been selling, not buying. Too much froth for me, much too much.But....some reality is beginning to creep back in. It's up to you whether you buy pre or post divi. In the past it's been cheaper in the month or two post divi. Having said that, there are 'specials' this time round.For me, I wouldn't pay over £4.30 (plus the divi) for AML. HSX is too pricey. NVA too illiquid. That leaves LRE.In my view LRE are good underwriters, but they are trying to fight a really tough market. I think that fair value has crept up to about £6 excluding the divi. But no higher. But that's just my view.I'm piling up cash, ready for a better time to buy.........
Warthog4
03 Mar 2015
Re: Take profits? 4+% drop since close last Friday-any ideas why anyone?
Rober01
28 Feb 2015
Re: Take profits? Specialist insure with a base in the Bahamas. Has a policy of returning capital it is not able to adequately utilize to investors by way of "special dividends". With the current profit position in the insurance cycle that has been a good percentage this year.I picked this one up shortly after its IPO but did not buy for a number of years big mistake, big loss!!!
Proverbs 26 vs 5
27 Feb 2015
Re: Take profits? My broker said that they were an independent Lloyds underwriter. He thinks that with the exit of Brit they could become a target for takeover. I have just bought a holding.
Broncomaniac
27 Feb 2015
Re: Take profits? Up another 15% over the last 2 weeks since these messages. As Greyinvestor was so good at calling CGL, I decided to wait for LRE to get below 550p (I recall Greyinvestor said 500p was fair value). It sure has been frustrating watching it rise! It is very tempting to get in now, as it shows no signs of stopping.Could holders enlighten me on a couple of things? 1. What is LRE invested in? Do they invest in equities? If so, if the index heads back down from 7,000 it should take LRE with it.2. What are the main types of policies that LRE underwrites? Are they into hurricane / catastrophe insurance? I understand that premiums are rather low currently, as it has been many years since the last costly storm.
GoonerBoy1886
13 Feb 2015
Re: Take profits? I don't see the point. While they're kicking out so much cash every year in dividends, why bother. So you book profits to wait for a fall and buy back in, that might be a month, 3 months, 6 months, you might miss a few big dividends while you try and be clever. My view is simple, if it's worth holding long term, which this is, don't try and be too cute with it .... I don't even think on any basis lancashire is expensive right now. It's gone from very cheap to cheap. In this low yield environment, stuff like this is GOLD!!
Greyinvestor
12 Feb 2015
Take profits? I'm inclined to hold for the very long term. In my view LRE are the best underwriters in town, and the company could easily be acquired. If I was a trader, I would probably sell. I think that the shares have gone too high.There is still a ton of CGL money that will find it's way back into other underwriters. I'm up to nearly 50% cash in my SIPP; I have only ever held such high levels when I believe that a market top is approaching. Sadly I can't sell out of my private portfolio because of a) the need for income and b) the vicious effects of CGT.
gamesinvestor
12 Feb 2015
Numis [link] broker retained its 765p target price for the stock, which had jumped 5% to 643p by 10:34"""Games
gamesinvestor
12 Feb 2015
Re: Final results Good incite Grey - saved me a lot of leg work.After this morning's hike of almost 5% perhaps you are tempted to take profits no?Games
Greyinvestor
12 Feb 2015
Final results Results out today. The usual blizzard of data, obscuring some essential truths.Book value $6.96 v $7.50 ie £4.55. Down due to special dividends.ROE 13.9% v 18.9% - weakNet premiums $742m v $557m, OK, post acquisitionPBT $226m v $218m, could have been betterEPS $1.16 v $1.17 - not great, bearing in mind the acquisition, say 76p in sterlingCombined ratio 68% v 70% - good, compared to the competitionFurther 50 cent/33p dividend, payable April 15th to holders on record on March 20thBond duration 1.5 years v 1 year. I prefer 1 year.My thoughts; there is nothing much said about the future. Rates have come down hard. Claims will go up. It's getting mighty tough in the insurance market. The new year will see higher claims and lower dividends. LRE has handed back more capital than I would like.In my view the share price has gone too high. But I'm not a seller. I wouldn't pay more than £5.90 for the shares, and I would put fair value at £5.35. The whole market is now very fully valued, but then I believe that the whole stockmarket is grossly overpriced.
Greyinvestor
08 Jan 2015
Shorters [link] this. Odey shorting the stock. I can't see much upside while Odey are sitting on the register.
Guitarsolo
31 Dec 2014
Re: My valuation Hello Grey, I think you are pretty much on the money. Less scientifically than you I would put fair value at anywhere between 500-550p.I would rather LRE didn't return my capital but instead put it to better use. That said, if they don't see good underwriting opportunities (because rates are depressed and heading down) then I would rather they didn't underwrite just for the sake of it. Underwrite for profit by all means!It will be interesting to see how the EPS and divi predictions move over the coming year. I would happily take any divi over 50p I think. GS
Greyinvestor
31 Dec 2014
£5.35 Apologies for the typo. Both numbers should have said £5.35
Greyinvestor
30 Dec 2014
My valuation £5.35This is the Q3 book value, converted to £, less 75p, less 10% warrants (everyone forgets these), *1.4 = £4.35.The value could be a bit higher because it does not account for this year retained earnings.Or it could be a bit lower to account for pressure in the market.
Guitarsolo
29 Dec 2014
Re: Ex Div target....425. Brave call LG! That would be a forward yield of well over 10% (assuming predictions of 50p or so are accurate). I don't see it falling that far without some serious claims or market-wide calamity. Is your mystic Meg chart predicting either of those? Or just a stab in the dark? If it did drop that low I would most likely pile in.HNY!GS
