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Old Republic International Corporation Message Board

  • playthekeys27 playthekeys27 Dec 12, 2005 5:51 PM Flag

    Congratulations ... and caution

    Congratulations to ORI shareholders on the new high valuation and the special dividend. The 5:4 split is a piece of mechanics that I could do without but is consistent with ORI�s history.

    This is the first time I�ve posted on this board without recommending a buy. In past posts I set $28 a share as an intermediate target, measured at the current float of a little over 180 million shares. Now it has achieved that. ORI has had a substantial period of consolidation, largely induced by misperceptions or overemphasis on its mortgage and title insurance lines. Those who�ve had confidence in the excellent management to continue the good underwriting (with a few blips on the title side, now apparently resolved) have been rewarded.

    Naturally there will be a discussion as to when, precisely, is the right time to invest around the special cash dividend and the 25% stock dividend, a.k.a. 5:4 split. I submit this is a little foolhardy. The actual right time to invest in this stock is when some flaky poster comes on this board with a comment to the effect of how flat and boring ORI is. Another good time to invest is when the market is panicking over macro factors like Fed tightening or perceptions of the housing market and its supposed effect on all stocks with any kind of tie to real estate.

    Board veterans may remember a series of posts from a hyperactive investor named �I Render It� after the 2003 special dividend and 3:2 split. He clearly wanted to �play� these events and justified it with a very shallow conviction about ORI�s particular strengths. Then, as the market was bombarded in early spring 2004 with news about the coming reversal of the Fed�s loosening policy, Render began blasting this stock and predicting doom, at one point even saying it would be cut in half (never mind its ratio to book value). He sold at a slight loss and congratulated himself on his stop-loss discipline, telling us we were fools for not moving on to something else. Either you get it that ORI shareholders benefit from the company�s record of managing through a variety of market environments, or you don�t. He didn�t, and he lost out. Sure, you might say �I won�t be that dumb.� But �bad news� is always lurking and it just isn�t being emphasized right now in the discussion about ORI. That could easily change; will you be ready?

    I�m not doctrinnaire about buy-and-hold investing, but ORI is the ultimate �set it and forget it� stock. Very often why you buy a stock predicts why you will sell it. Even if you come to ORI now because of the attention it�ll get for a while, the real reason to buy is because you have studied the company and understand its balanced, careful and mature portfolio of risks taken and investments made. That will prevent you from making a mistake, like expecting the stock to keep making new highs throughout the first half of 2006, being disappointed, bailing out, and wind up having �bought� a dividend with nothing net to show for it.

    My best to all *dedicated* shareholders of Old Republic International, and happy holidays.

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    • In some previous posts I asked for some opinions and advice about this stock. One other thing I like about this stock is the quality of the posts! No ranting and raving...just good logical discussion about how to make money.

      I've owned ORI for over a year now and have added to my position twice. I'm a small investor, but ORI is part of my 2 year old's Coverdell college fund. If nothing changes with management, I should be an owner for the next 16 years.

      Thanks again to everyone and good luck with your other investments.

    • Thanks

    • Yes, indeed, it's always better to "buy low." I don't have any idea where the price is headed short term. I don't have an opinion on when to invest, regarding the special dividend or split. Sure, there could be weakness in the stock that lasts a while. There has in the past.

      But long-term, I remain bullish. If someone is a long-term investor, I'd say buy ORI whenever they have the cash and it fits into their portfolio strategy, rather than timing their entry point.

      I don't think you can read a post on a public message board and conclude the opposite. I posted a number of months ago that $1,000 invested in ORI in 1967 would have turned in $1.1 million by 2004. I asked why the stock was such a secret. Others with a long-term investment perspective posted similar things that were bullish on ORI. As it turns out, that would have been a great time to buy the stock. But by your logic, it would have been a time of concern...someone talking about turning $1,000 into more than a million.

      Everyone here is an anonymous, presumably a non-professional, small, me, and everyone else. You would have to conclude from a contrarian standpoint that you'd have to do the opposite of every post. Obvously some don't have merit. But perhaps the flaky posts are intentional, to throw people off. I think they are usually meaningless, just ramblings from flaky people, but who knows. But I would never use the sentiment of one or two posts to make a decision about a stock. I wouldn't use any post to make a decision, including mine.

      • 3 Replies to ou71764
      • 20% a year appreciation aint bad!

      • OU -- I think you're taking my comment about watching when the flaky posters appear a little too seriously. A little tongue-in-cheek, yes? Maybe I shouldn't be so droll.

        Of course these posts don't have intrinsic impact on the market, but it is fascinating the correlations you can make. You don't see any remarks here about rising interest rates affecting mortgage/title insurance right now, even though the Fed just acted again. Why not? Because the stock has gone up and the company has declared a special dividend, that's why. People don't post negative stuff when that happens. Meanwhile, not enough plain folks look at this stock when it's flat. Too bad.

        Virtually everyone here agrees that the one way to invest in this stock is to get in and put it in the vault. I simply want new investors to get in for the right reasons (as a recent thread on this board stated) because why you buy a stock often predicts why you sell it. For example, a Barron's article is a good reason to HEAR about this stock, not to invest in it. I would suggest new investors pay far more attention to the "Business Update November 2005" presentation on the (almost hilariously bare-bones) ORI corporate website. The information there is why you should invest -- if you absorb the material and don't panic if the stock droops for a while. ORI is such a boring company that it may not appear for another few years in Barron's except *possibly* an annual passing mention due its increases in its regular quarterly dividend.

        And hey, I was very bullish on ORI throughout 2004 -- just look it up. I'm still bullish in a generic way but I simply don't recommend a buy at this time. Believe me, I won't hesitate to pound the table again if I think the price and time is right for individual investors.

        Good investing to all.

      • Happy Holidays to all on this message board,

        I still feel Long Term ORI is a Stong Buy. I have met much of the upper management of ORI including Al Zacaro. I have been in management for many years with four major companies and have seen all types of upper management. I have seen companies that cannot make a decision that do badly. I have seen high flying management that are going to change the world and only fail. ORI is not like that. I feel ORI is conservative. Al is an ex-accounting type. Al is quite conservative buy modern in his style. He knows that if you sell good products and do the underwriting right you make and save money. He pushes hard to accomplish those goals. He just does not want to get into the junk and he doesn't. In insurance that style is a very good one. As long as Al is in charge, I am glad to give him my money through my continuing stock BUYS and LONG TERM HOLD.

        All please read:

        To me that article says it all. It is a simple calculation. ORI has assets of $11.3 BILLION yet the stock market valuation is only $4.9 billion. If you take the total shares outstanding of 183.2 million and divide by $11.3 billion, you have an idea of what value you have here of $61.68 per share.


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