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Assured Guaranty Ltd. Message Board

  • iq180plus iq180plus Jan 18, 2013 6:49 PM Flag

    A question to the wise reguarding 42 dollar book value and net asset value of their

    fiancial assets minus liablities.
    Why the 15 dollar share price?
    Are their finaical assets overstated, are their off balance sheet factors, liabities that understated?.
    Allowing no value for non financial assets, and subtracting liabities seems to get a whole hell of a lot more than entrerpise value of the company.
    what am i missing?
    I am looking at buying based on their net asset value which seem to far exceed enterpirse value/ share pirce.

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    • Rolling forward past experience probably has the effect of understating reserves as most people think state and local governments have problems with unbooked (pension and medical) liabilities that will lead to distress in the future. How much is hard to say.

      $25 GAAP book value is certainly more reflective of value than the $47 adjusted book value they throw out there. I tend to agree with Moody's downgrade and like the fact that they are not relying on models incorporating past experience as that sort of approach sure hasn't worked in the past. Still, you have to have some sort of basis and if AGO deserves a downgrade, I sure hope they will be consistent and downgrade wide swaths of municipal finance.

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