I could not agree more. ORI is on my "no brainer" list of holdings. Great dividend, but ficus now on some capital appreciation.
Sentiment: Strong Buy
Thank you for the excellent summary. I am in and hope that this one will be as good an investment as RLI has been.
Glad to see that you recognize that Cramer is an idiot. Now if you could convince the rest of the investors of this fact, you would do a great service to humanity. I don't understand why CNBC tolerates him. I guess they just have a lot of time to fill and think they need an idiotic loudmouth to do it.
Cramer was on tonight saying it's too early to buy dividend paying stocks. I wonder if it will be as good advice as he gave when gold was $1,800 per ounce and he said to put up to 20% into it LONG TERM for diversification. WHEN has gold ever been a good long term investment?! But it's too early to buy ORI with a 5.5% yield that's secure and rising. We'll see.
People don't get it with ORI. The dividend is secure. It was fully covered at the depth of the financial crisis with 2 of their 3 major divisions directly tied to real estate and bleeding red ink like nothing the company had ever seen before. Yet their general insurance division easily covered the dividend.
So the stock pays 5.5% now. The increases will start accelerating within a couple of years. The dividend is .72 now. By 2018 I predict that it will be over 1.00 and the stock will be at least $10 per share higher. Assuming it isn't bought out at $18-$19 first.
I added at 12.99 today - couldn't believe we were back to the 12's. Who knows, maybe we'll approach the 6% yield level again ($12 per share). I don't know where the bottom is. But I wouldn't bet on it. The obsession with the Fed and rising rates is trader groupthink, and you can bet that when the traders start showing up on CNBC to tell you to bail out, that at least some of them have their buy orders in place.
Stocks are not bonds. Go look at the long term historic dividend yield when there was a normal interest rate environment. I know ORI doesn't normally yield 5.5% when its prospects are moving higher and interest rates are "normal." It's a gift. I'm locking in ORI long-term - if only I had bought $1,800 gold for long term diversification, LOL!
Sentiment: Strong Buy
If the overall market stays weak, ORI could have further weakness as it is part of the S&P 500. But I'm expecting it to hit the 4% yield level, $18 per share, yet this year. This company is hitting on all cylinders with all 3 major divisions. Added at 13.80 last week. Hopefully I can get some cheaper this week.
Sentiment: Strong Buy
I have two ID's. This one better explains what I do.
I'm working on a couple of ideas. I hold 6-8 stocks - very focused in my best ideas. I don't disclose them while buying or researching. I do afterwards, but they then may no longer be a buy. My last position was in VOYA at $20.38 average cost. It's already shot up. Do your own work on it.
The low interest rate environment also means ORI profits are limited as they make most their $$ from bond investments and a very little from underwriting.
I sold all my ORI in my IRA's at 14.25 yesterday. In my personal account I am holding until the one-year mark. It's becoming fully valued, but that does not mean it will not continue to go up. I'm finding value elsewhere now.
The 5% yield is a place to take money off the table, but I think we'll move higher as long as interest rates stay low. At $18 per share the yield would be 4%. In this interest rate environment with the company's outlook improving, that's achievable. Too early to know if we'll make it there, but the dividend is easily covered while I wait.
Actually that dividend is over 8% based on my purchase price. I'm starting lighten my position with limit orders at $14.40. Not getting all the way out. Finding great values in a couple of other spinoffs.
I started buying this stock after the cancellation of the spinoff announcement in July. bought more in August and October. Average cost is just under $8.50 and hold 44,925 shares. Had a 6+% dividend paid to me during that time. This has been my second best investment during the last year. Wish there were more options so I could hedge some of my profits into the long-term holdig period.