I am still trying to understand a couple of things:
1. RFIG losses Still losing money in addition to reserved losses. As of Q2, GAAP capital was 96.5 (180M debt less 83.4M equity deficit). So presumably, losses will stop when this is exhausted (next quarter or two). Sometime later, the 180M can be written off.
2. RFIG assets Consolidated assets shows RFIG at 2090M. How much of this has been reserved? In other words, if RFIG fails, what is loss to ORI?
3. CCI What is the real exposure here? Obviously the lawsuits are large or the legal costs would not have been taken. But how large are the other obligations? I heard something about excess of 85% claims rate is obligation of ORI.
OTOH, other parts of the business could sustain the dividend. And the excess book value provides a buffer. Long-term, yes. Patient, yes. I would add a willingness to suffer volatility as the losses continue to be felt.
When it's clear to everyone the stock will already be 10, if not 12. The mortgage insurance division is walled off and CCI has entered the "end game." This is not an open ended liability. It's in run off, not ongiong. Each claim can only be paid once. Even with the MI losses, the company is cash flow positive.
That makes no sense to me, to short a stock that is cash flow positive and paying a 9% dividend (that is sustainable), but eveidently someo people were. Quantuon started posting here when the stock was 8.06 and yielding 8.8%. So he hasn't been laughing all the way to the bank since he showed up here. And pretty soon the shorts will be on the hook for another .1775 per share as the dividend date is approaching.
I wish we'd go back tothe 9% area so I could get more. THere is risk with any stock, including ORI. But the risk was overstated imo.
Well, there is 'clear' (as in the risks have passed and the stock may be trading at quite different levels) and there is 'clear' (as in the financial reports etc make sense). I am looking at the latter, especially the amount of CCI losses ORI may need to cover. I agree it is bounded; but I do not know the number.
The issue is not so much one of solvency (book value is quite high), but liquidity. Suppose MI needs to refinance loans but market will not do so in a reasonable way in the needed timeframe. This could have a large impact on the equity price, and for a long time. I agree it looks pretty good, but often that is not the case (else we probably would not even be having this discussion).