ExpatBill
19 Feb 2016
Re: Results out Thanks very much for that breakdown Greyinvestor. As a lazy investor and no good at interpreting company results I value very much your posts and personal judgements about share values and company prospects, not just here but on other sites as well such as CNKS. Don't worry I won't blame you if one of the shares you like goes belly up. I remember when I thought I had a good investment in Coloroll then one day had a look at Beeb2 market news and eeek Coloroll had gone bust - lost a few thou in that debacle. Anyway enough of the sob stories - thanks again for your efforts.
Greyinvestor
18 Feb 2016
Typo apology Apologies for the typos, I'm on holiday, using a Microsoft Surface and my eyesight is no longer brilliant. All of which makes typing hard work......
Greyinvestor
18 Feb 2016
Results out The LRE results are out today. I'm a big holder off the shares.The fully diluted NTA seems to be $5.30 = £3.70 sterling. On a multiple of 1.4 this values the business at £5.18 sterling.EPS = $.87 = 60p approx, valuing the business at £6.00 plusCombined ratio 72% v 69% prior year - fineInvestment return 0.7% v 1% - OKDuration 1.5 years v 1.5 years - OK, could be shorter.At long last the founder warrants have been exercised and have now gone, leaving clen numbers.Dividends (converted at $1.43 to £1), £0.42p for 2014 and £0.77p for 2015 = £1.19 paid out this year. A 7p divi in March, I wasn't expecting that. So a huge payout this year.Now for the bad news; net premiums fell from $742m to $481m ie a 35% fall. This is pretty awful.My summary; DYOR, but I think that this continues to be a terrific cash generator. However the company cannot shrink forever. It needs to find ways to generate new revenue that is profitable. I'm thinking about valuation, but my instinct is that this is worth closer to £5 than £6. The shares have been fine for me though, because I have enjoyed the huge returns of capital. I wouldn't add at this price.
Greyinvestor
12 Feb 2016
lre value Hi Games, I half agree with you.I am a holder of LRE and will continue to hold. I note that Invesco are adding.If you look at the dividend history on this website, you will see that LRE has handed back huge amounts of capital to shareholders. This distorts all the numbers.In my view LRE is pretty much in line with the market in terms of valuation. Their market is very tough, and the company is shrinking while it can't find business that it likes.I would prefer the company to retain capital and grow, but if it can't, so be it.The company does normally earn what it pays out in dividends, but if it has too much capital, it pays it out as a dividend.I wouldn't be a new investor at this price but I have no problem holding. There are lots of shorters of the share, i know.For me this is a long term strategic holding. A Hold for me.
gamesinvestor
11 Feb 2016
Correction? Used to be a holder of LRE back in 2014.I was thinking of getting back in here, but looking at some of the numbers, it looks like it's very vulnerable and well over priced. Perhaps others can comment.When I say the numbers :-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
aspace
07 Jan 2016
Re: Announcement of no news I thought the salient point was that the statement addressed the very subject that had caused us concern at the beginning of December: why had the Cathedral CEO and CFO departed? As hoped in my posting of 8 Dec it was not due to anything nasty or alarming (despite the negative market reaction to the news) but rather a natural evolution of the management team as Lancashire integrates Cathedral. A clue as to why the high profile departures occurred at this point in time might be alluded to in the final paragraph as being a difference of opinion on underwriting philosophy across the various Lancashire businesses.
Greyinvestor
11 Dec 2015
Announcement of no news I don't know about you, but I think that the salient point about the latest announcement is that it contains no financial news. No news is basically good news although, as I have said before, forecasts have come down.In a market that is falling heavily, these are now quite stable at around my fair value level of £6.00.A Hold for me........
Ripley94
10 Dec 2015
Chris williams "oil " Tipped it on 6 Aug 2015....claiming it might double from 637 ?Now dropped to 600
Greyinvestor
08 Dec 2015
Topped up Topped up my holding this a.m., with a decent chunk just sub £6. Reasonable but not great value.My reasoning? No RNS today, so I'm assuming that the lowered EPS expectation has done it.....
Greyinvestor
08 Dec 2015
Re: Oh dear.. I think you are right. LRE is really tight with it's pricing, and won't write bad business. An underwriter in aviation and energy is going to be finding things very tough, and may have written some bad business. I've noticed that there is a fair bit of movement in analyst forecasts for 2016. It's quite hard to nail down what a good forecast might be, but I'm tending to go for the bottom end, which is about 45p EPS, down 10% plus from this year. I would also go for a DPS below this.comparison, BEZ and HSX are growing, thatnks to speciality and direct insurance businesses, both of which LRE needs.My suspicion is that Cathedral has dragged down the group EPS forecast for both this and next year. I'm in for the long haul. I'm not selling.
aspace
08 Dec 2015
Re: Oh dear.. The lack of announcement leaves us to guess what may have happened which may bias us towards undue pessimism. The 11% drop does appear related to the Cathedral Capital CEO and CFO departures as announced on Insurance Insider (thanks to Bulltraderpt). The FT has also picked up on it and reported insiders as attributing it to a culture clash. [link] which case this may be disciplinary action resulting in a welcome cost saving where shareholders have overnight saved the costs of a divisional CEO and CFO. That may also explain the lack of an announcement, as a fraud or serious risk mispricing error would surely demand a prompt announcement to the market both by the London Stock Exchange and Lloyds. But there is nothing on Lancashire's website as at two minutes ago, which would be consistent with internal disciplinary action been taken. Furthermore, Cathedral was regulated by the PRA, FCA, Lloyds itself, audited by Ernst & Young. Plus Cathedral employs its own army of exposure management analysts and overseen by exec managers, internal auditors and a board all in a post-GFC world where we have a heightened sense of risk. Surely this oversight must limit the downside. In the worst case Cathedral may have mispriced risk and therefore need time to recover. That happened at Amlin back in mid-2011 after which there followed a continuation of rising dividends, steady share price rise and profitable takeover a couple of months back. I held Amlin before and after the disaster and remain happy to have done so.
Broncomaniac
07 Dec 2015
Re: Oh dear.. Is the damage to the share price today not just due to the flooding?
adriano
07 Dec 2015
Re: Oh dear.. Hard luck re the top-up. I wonder what's going on ? I was wondering about buying back in, but this will depends what happens in the first half hour of trading tomorrow after the insiders get gossip and act accordingly.
Inatthetop
07 Dec 2015
Re: Oh dear.. Very bad form not to announce this when it happened. Topped up early this morning before the news came out. Big mistake.
Greyinvestor
07 Dec 2015
Re: Oh dear.. There must surely be an RNS on the way, this is pretty big news.....
