% | $
Quotes you view appear here for quick access.

United Fire Group, Inc Message Board

  • holdonval holdonval Dec 2, 2010 3:03 PM Flag

    new states

    No comments yet about the purchase??

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • Making posts is difficult while doing research. I've recently started posting because opportunities are lacking, resulting in LOTS of slack time.

      My original thesis for purchase came about in the events as followed: 1) UFCS popped up on my screener, 2) Saw pictures of headquarters underwater, 3) Shares were trading between $16-$17 range while book value was $24; 4) Fixed income portfolio was under distress - HUGE opportunity for unrealized gains once the 2009 fiasco subsides, 5) Really appreciated the ceo's annual letters, and most importantly, the company's adamant stance on strict underwriting standards, 6) The company was repurchasing shares in my purchase range, 7) Insider ownership was fair

      The shares were priced as if the hurricane permanently wiped UFCS away... creating a nice buying opportunity; moreover, the above variables were enough to make UFCS a 5% holding for me.

      MIGP purchase was "okay". I guess the purchase had to be made at book value or the buyout probably would fall through. I was a little startled when I read in 2009 10-K, MIGP held 43% of fixed investments in municipals, but the most recent 10-Q shows approximately 31%.

      However, given the nature of how overvalued fixed investments are trading presently, I'm afraid the fixed investment portfolio may be overvalued now.

      I'm thinking the recent price declines is due to the municipal bond scare

    • Acquisition should be good for the company, only question is whether the political climate in the new states will fry home office's brains.

      NJ and CA are not the most business friendly places to do business.

      If the products being handled by Mercer are spread across the UFCS family of agents, and vice-versa, should be some great cross-selling growth potential.

      As to the acquisiton price and market cycle for insurance in general, both look good. I am a hold (overweighted on this company).

39.30-0.09(-0.23%)Nov 25 4:00 PMEST