I suppose it depends if you are a trader or an investor.
I suspect a trader could make a little money here. There will be some sort of bottom, and a 5%-10% bounce could allow some quick profits.
As an investor I think there are some challenging questions. 1) are the reserve increases done? My opinion is that the California workers comp will be an issue for some time. This line of insurance tends to show very aggressive loss development.
2) how valid or the earnings for the last year or two? It seems clear to me that they made their quarters through reserve releases and share buybacks. The company needs to actually make money. Given the low interest-rate/investment income environment, it will need to be through underwriting insurance. It can certainly be done, but is not a sure thing.
3) how will the stock act without the company in the market doing buybacks? Maybe they will continue these, but my gut says their financial flexibility is more limited now.
It isn't as if I think this is a doomsday scenario. I just question what sort of catalyst is out there. The stock is currently trading at about 12 times current year estimated earnings. A lower price does not necessarily make the stock.
I dont see how folks didnt see this coming- their profits have been decreasing for five consecutive quarters, and all of their growth has been in workers compensaton, especially California workers comp. This is esentially a negative margin business that has a "lose a little on each one, but make it up in the volume" aspect to it.
Once their ability to make quarters by reserve releases and buybacks was done, they were in trouble.