Greyinvestor
07 Mar 2016
Topped up After a period of contemplation, I have decided that £5.50 represents fair value for LRE. I want to maintain the value of my holding, post the special dividends, so I have made a decent sized top up of my stake @ £5.50. This represents 1.5*NTA and 12* possible future earnings.I hate to bet against Odey, who are shorting the stock heavily. I'm with Invesco and Woodford, plus the directors.But DYOR.I note that NVA declared good results and the share price rushed up accordingly.
aspace
05 Mar 2016
Re: lre value If Woodford, Invesco and CEO Maloney are taking advantage of LRE's low value then maybe they're onto something. LRE has always looked pretty good under my calcs, although I am slightly out of date now and need to spend more time on it. I do recall Greyinvestor you were conservative in your value calcs on Amlin at a time when I thought Amlin represented excellent value. I ended up adding and adding to my Amlin shares until it became my second largest holding. Then along comes Mitsui and forced me to sell up albeit at an excellent premium. Thinking to myself I need to get my calcs updated on LRE as now might be a superb time to top up, as others are evidently doing. As to other ideas, my largest holding is Berkshire Hathaway B shares where I remain happy to top up on the dips. Berkshire is so big these days it is virtually an index fund of the world's best companies. Being still in full-time employment with limited time available for research I'm not after spectacular gains so Berkshire suits me fine. Also happy to continue holding Lloyds Bank, Reckitt Benckiser and Persimmon.
VoxVoci
04 Mar 2016
Re: lre value I see from a couple of news items that Woodford Investments have added to their position in LRE by 320,000 shares and now hold 11%Invesco have added again to the tune of over 1.7 million shares, taking their position to 21%Between them thats around £11 million.They seem to see some value here.[link]
Greyinvestor
04 Mar 2016
Re: lre value p.s re BMS, it's the scarily low Baltic Dry Index that worries me most about that.........
Greyinvestor
04 Mar 2016
Re: lre value Thanks Games, I'll have a look at those. I tend to trip over the John Lee stuff. I think he's very good but some of his stuff is a bit expensive v weak balance sheets for me.I like Christie, but it's not that cheap. AMS certainly not cheap, but yes growing. Augean cheap but slightly dangerous business. Good ideas though.My Novae are motoring, so at least that's doing fine.All the best, it's nice to have returned to blighty and some spring sunshine.......
Greyinvestor
04 Mar 2016
Re: lre value Read the dividends under Fundamentals under Analysis on this website. There are huge Special Dividends.......
Broncomaniac
03 Mar 2016
Re: lre value Games, I just took a look at CTG. You said it has a good divi, but according to iii it is less than 2%! Is the information on iii incorrect?
gamesinvestor
03 Mar 2016
Re: lre value Grey -- Good response -- I'm only observing the pain fortunately and not suffering it as I sold some time ago. I guess I'm not going to be a buyer here unless it falls pretty radically.I see you're into Braemar - I've been watching it but not sunk any cash into at this point.You might want to read John Lee (Lord Lee) in the FT.He covers AIM/Small Cap and has recently invested in Braemar.My only concern is that Braemar is benefiting heavily from the offshore storage of oil during this glut. What would be the impact if the oil industry turns -- which it could well do at some point, since oil consumption continues to grow at just around 1% a year. Braemar is small and flexible so it may not be a problem.This is one of the articles I'm referring to :-[link] is it always me that volunteers my ideas?)"""Good point mate -- galling as it may be, you can at least console yourself in that some eejits (like moi) are paying some attention.Just to alleviate the stress of responsibility and let you sleep off the jet lag better, here are a few suggestions from another hopeful investor :-1. Advanced Medical Solutions (AMS) -- great products in health - wound care - massive potential for growth. Strong balance sheet, well managed.2. Augean (AUG) - Waste management - solid company - slight risk to landfill taxes but this company handles lots of the more tricky hazardous waste and is run by a really smart CEO. I have a buddy as the Chairman.3. Christie Group (CTG) -- One of John Lee's picks. Good long term business well managed and a strong long serving CEO - no debt, low P/E - good divi and well covered.So these three are all AIM stocks, an area I have historically excluded because of governance, but in this case I've made an exception. Collectively the three are 2.6% of my portfolio, but I expect to take that to 5%, probably split unevenly and biased towards AMS.There you go mate, pressure is off.Games -- sleep well now out there in the U S of A.
Greyinvestor
02 Mar 2016
Share price drop Forgot to say that the share price drop just equates to going ex dividend on the special dividend, so no real change. Sorry to disappoint people!What I would really have liked out of LRE is an Outlook statement. This should have come from the Chief Exec. Why didn't you do one Lancashire? I did notice a mild one from the FD.
Greyinvestor
02 Mar 2016
Re: lre value Hi Games, i'm away on hols just now so apologies for a basic reply.First of all I don't disagree with your sentiments, or the many hedge funds betting against this stock. But.......my calculations, at an average exchange rate of 1.45, shareholders have had £3.00 from the company over the last three years. How you split it is up to you, say 30p dividends and 270p capital. I think this is about right, but i may be wrong. As a recent investor you may be doing ok, which i am, more or less, but longer term investors will have done less well.Then you have to do another valuation today.The founder shares have now gone, so future numbers will be cleanThe Eps forecast is 47p, giving a multiple of 11.76, not extreme.The NTA multiple is 1.5, again not extreme.Now you have to think about the market. Appalling competition, floods of new money, no usp, no investment profit. I agree it's not good. Even Warren Buffet says so.Beazley are doing fine in their niche, Hiscox slightly less well and they are on a huge multiple, Novae report tomorrow, and what of Lancashire. Hmmm...Lancashire are chosing or being forced to shrink. Their argument is; come the next catastrophe we will be fine, prices will rise and we will grow. It's taking a lot on trust.I probably should have sold, but I'm not sure that I have suffered the appalling pain that you describe. I feel as if someone keeps handing me large wodges of cash to keep quiet. I'm in the black on a decent portion of my portfolio, and i've been well rewarded, sorry.Am I a buyer or a seller? Neither actually. I am looking and looking and looking for other stuff to buy. Recent purchases have been Apax, Braemar, Novae (why is it always me that volunteers my ideas?). Anyway, all the best, i'm off to sleep in the USA and will wake to read the Novae results and head to an airport.If anyone at LRE reads this, you will understand that you need to do two things; copy bez and hsx and specialise in a few areas, and communicate better with your long suffering investors.Am i right in thinking that Invesco, whom i respect very much, are adding?As always, dyor and don't follow this old mug.
gamesinvestor
01 Mar 2016
Re: lre value Grey - I see your point about the handing back of capital, but surely that is a complete waste of time, as it's simply giving you back the money (value) you already own.It's like saying I'm floating a company and I want you to invest £4 a share. When floated the company handed back a £1 to each shareholder on the basis it only needed 3. In effect the company after the handback is worth 75% of what you invested in initially.The same is true for paying an unfunded dividend, the company is simply bribing you with your own money.If you forget about these two potentially useless mechanisms above the only thing that matters is the growth in the GAAP earnings -- all else is fantasy land, as is "adjusted earnings".Looking at Pre-tax profit, in 2011 made $218M. Today it's about $140M -- projected 2016. That's a decline over 5 years.The revenue has gone the same way.Valuing the rest of the aspects of the company is very opaque. It's generally going backwards, unless you think it's a bid target or something, the stock looks like it should be sold.Then look at the dividend -- in 2011 it yielded 1.3% and was probably covered 10 times. Today the yield is fantasy at 9% and just covered by earnings but possibly uncovered by cash.Games
gamesinvestor
01 Mar 2016
Re: What's Going On? Vox - hasn't this fallen in sympathy with Hiscox announcements?Also I can't value this stock and don't understand Maloney's decision to buy at 5.60.I'm looking at this and can't yet see a counter argument against this valuation being cut by at least a 3rd :-"""""looking at some of the numbers, it looks like it's very vulnerable and well over priced. The EPS has fallen significantly every year except a 7% gain in 2012, lost 40% last year and is set for a further 12% decline this year (that's only a guide of course).Pre Tax is set to fall and the revenue is flat.The dividend is uncovered (0.9%) and probably less so by cash (I don't know on that score).The P/E is 14.4 for this year, compared to 8 back in 2011-12.This stock looks like it's heading toward £3-4 level."""""""Games - Unless someone has a valuation method better than my simple points above I'd be a seller of the stock.
VoxVoci
01 Mar 2016
What's Going On? It's been an interesting day. 3 Cathedral Underwriters resign.Share price plunges over 6%Chief executive officer Alex Maloney buys 44553 shares at £5.60 which equals £249,496.80 bringing his total holding to 426561 which at current price equals £2,361,015.14Should I be following Mr Malony's lead and topping up or should I be bailing out?When I say following Mr Maloney's I should add I do not mean in terms of volume but just in terms of being a buyer.
ExpatBill
20 Feb 2016
Re: Results out Sorry Grey - you've got a follower whether you like it or not (hoho). I liked your postings about Catlin, jumped in, and made a good profit when they were taken over. I understand you not liking to lose a good divi stream from a good company but personally I was very happy with the capital gain and put the money into CNKS and LRE. Haven't a lot of spare cash right now but will check out NVA. Please carry on with your posts and musings - judging by your 'up votes' I'm by no means the only one who appreciates them!
Greyinvestor
19 Feb 2016
Re: Results out Thanks for the kind remarks Bill. Probably just as well not to follow me; thanks to my S E Asia holdings, I am underperforming the FTSE this year, for the first time in a while.It's been a great year for dividends, I just had an unexpected one from CNKS as well as LRE.I do wish that companies would make their results easier to understand. LRE either deliberately or accidentally obfuscates on what is happening to revenue. They should also quote the NTA up front, not hide it at the end of an attachment. Finally they should be clearer about the Outlook.Having said the above, LRE does provide a lot of data. Oh well.In the insurance world, I have added NVA recently. They are growing, but we will see how profitable the growth is. I'm afraid that they will get taken over in the next few years, something that I dislike. I don't like being forced to sell up, as I was at Catlin.
