Much of the insurance is corporate and title. They serve all 50 states, but their specific exposure in OK or TX should be pretty minor.
The 4 analysts who follow the stock, and upon whose estimates the numbers are compared, do not ignore the RFIG earnings. They do ignore the capital gains on sales of investments. So the 32c reported is compared to 24c estimates, making this quarter a healthy "beat". It looks like the RFIG business may be a reliable source of positive income for the foreseeable future, so including it is probably the right thing to do.
I have increased by valuation on the stock from $16 to $18. I think we'll see $18-21 within the next 18 months. IMHO.
Sentiment: Strong Buy
Good point, Stein, the run-off is not part of the core business so it might be better to ignore it. It was a good quarter. I scanned the conference call on the SA transcript. Still need to listen to it.
After doing a more thorough analysis, I conclude the results are good but not as good as it seemed on the first pass. The RFIG contributed 8c, more than usual, last Q being 3c. So the results are in line with the top end of estimates, and in line with estimates if we back out the run off business completely. A good result, somewhat low in Title Insurance, which should improve in Q2. Conference call may reveal more.
Sentiment: Strong Buy
ORI will never make radical moves, but it will probably creep along for a bit on the good news. I am long with this one anyway in that it is in my retirement portfolio. This report will get me looking at buying some more opportunistically.
I'm increasing my valuation to $18 based on today's Q1 results and maintaining the same mathematical formula. Since last October, the stock is up 70c. That's 5% or 10% annualized. A total of 15% /year when adding in the dividend. Not too shabby.
I see PRE is getting bought out around book value. Different model than ORI, but it's unglamorous, steady insurance, like ORI. No reason to think ORI will get bought out, but I have always half worried about it since the stock has been so cheap.
ORI stock price is struggling to get over book value now. I thought we'd be back over 20 long before now. It would be very frustrating to get bought out at 17-18 just before the stock was about to run back to 20. A buyout at 18 would make for a great 1 day gain, but it would be frustrating to wait this long and then not get more. Just thinking about it after I saw PRE move.
I agree NYCB is fully valued on today's metrics, BUT my holding is based first on the solid high yield, PLUS what I believe is brewing (accretive buy of another bank). My guess is we will very soon know. As for ORI, it remains my first choice to park money. Both very conservative high yield holdings.
That is exactly the function of ORI in my folio....it is solid and not going away and can sustain a dividend in tough times. The biotech fueled party is gonna end one of these days and ORI is a nice one to have if/when that does happen.