This is kind of a relief. I was worried that WTM might consider a large acquisition with all the new money from Esurance:
<<We opportunistically repurchased over $250 million of our shares during the year at an average of less than $400 per share. Though the share price has moved up significantly, it is still well under adjusted book value per share and, therefore, we are likely to continue repurchasing shares in 2012. We will measure the value of new opportunities against the value and availability of the Company's shares.">>
<<We will measure the value of new opportunities against the value and availability of the Company's shares.>>
I take that as them thinking.... why buy another company and probably pay up, or a premium...if your own shares have a book of $542 and the stock trades at $458. Your best deal is your own shares. Also, their reinsurance business broke even last year basically, even though catastrophe claims were very large. Odds are the catastrophe claims won't be as bad in 2012...and because of the large catastrophe cliams, renewal rates have gone up nicely. Both coulkd add significantl $$$ to the bottom line. No mention of any cruise ship surprise liability. Phew.
SYA is a pickle. But I doubt that Buffet would sell to WTM his equal 20% stake. Because Buffet knows the book value of SYA is over $16 a share. SYA now trades for around $9.60 a share? Buffet wouldn't sell SYA at a $6.50 discount to book. He'd rather buyy WTM's 20% stake at a $6.50 discount to book! But WTM won't sell that cheap either.
I'd rather see SYA slash the dividend..which is double taxed....and then buy back shares aggressively.... if your stock is $9.50 and your book value over $16. I am sure some operator would have put SYA in play....if Buffet and WTM didn't own a 40% stake.