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Old Republic International Corporation Message Board

  • is3089 is3089 Dec 23, 2005 4:33 PM Flag

    ORI is a Solid Investment

    I just want to echo some of the other sentiments expressed by other posters on this board. I came across ORI using one of the stock screening tools. I set various parameters for what I consider to be important before I invest. ORI caught my eye for a number of reasons: Based on its Price/earnings ratio (approx 10), price/earnings growth ratio and price/sales ratio (close to 1), I believe it's undervalued. The company has excellent margins, increasing earnings and revenue growth, no debt, $500 million in cash, a high current ratio indicating they have the capacity to meet any financial obligations, high operating and free cash flows, a considerable amount of insider and institutional ownership, very healthy dividend and a low short ratio. I also like their mix of various insurance products, which lessens their risk in any one area. The cash dividend and stock split is just another added bonus. I have a varied portfolio and only a few stocks, which I consider to be core holdings for quality, consistent returns and safety. ORI is one of my core holdings and the only insurance company that I presently own. This is a longterm keeper.

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    • I agree with everything you said. ORI is a great stock for the long run and continues to be a STRONG BUY to $62 per share. If you have kept track of my other postings you know why I say $62 per share.

      I have heard on this message board a lot of comments about the window dressing of divedends, special dividends and stock splits. I don't think those commentors are seeing the full picture.

      I like the regular dividend because I get to spend the money now without having to sell any stock. Yes, I know that the stock value adjusts down to take into consideration the paid dividend. But, check the historical prices over the last three years and you will see that the stock bounces up quickly, so that the regular dividend is almost like free money versus the value of the stock.

      Yes, the special dividend has a bigger hit on the stock value and takes longer to recover. But again, check the historical price and you will see it recovers that special dividend and starts to grow again. This is some more free money. I ask - where do you get 6.5 percent on your money in the market and feel you are still in a safe play. Even long term 5 year CDs don't pay 6.5%.

      After the split the stock will probably be worth $21 per share. Yes, I know everyone assumes that this means nothing. Everyone assumes that the split does not change the value but think about this. How many new investors now, might finally be more interested because it is closer to $20 than it is to $30 and seems like a better value for the smaller investor. That is the biggest benefit on the stock split.


      Plus, through this whole process the big boys are watching and reading. Lots of good press and a good price to book really helps this stock in this industry sector. Lots of insurance stock are 2 times book and ORI is only 1 times book. Like I said the big boys, Hedge Fund Managers, Fund Managers check these points out. This is a good basis stock for them for a good steady growth that makes this a STONG BUY in the long run. Not every stock can be a "flash in the pan". Too many flashes and you can really get burned.

      Keep in mind also that if it is a good value at $26 and a better value at $21 only because people forget about the split and only think about returning to the old high. It is like everyone expects it to return to the old high and it does.

      These things all play into why the stock goes up and why this continues to be a STRONG BUY.

      Happy Holidays.

19.26May 27 4:04 PMEDT