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OneBeacon Insurance Group, Ltd. Message Board

  • sage533 sage533 Feb 3, 2010 12:13 PM Flag

    Conf call

    Very good Q. They are selling low return lines and freeing up a lot of capital. Uses of funds include special div, stock buyback, buying more specialty lines business. All capital ratios improved in Q--debt coverage, debt/cap, ROI. BV up to $15.03 and the bond market has improved more in 1Q 2010 so BV will move up again this quarter. Expenses higher than normal due to acquisition costs in specialty lines will trend back to normal. All in all sounded pretty good. I would not be surprised to see a special dividend. They paid $2 in the recent past and White Mountain might want the $$. It is really up to them as they own 60%. I think it is real possibility the White Mountain could buy in the remainder of the company. It would cost them $600MM but they would get a book of business at about BV.

    S&P put OB on watch list negative this morning but from the report they did the work before today's earnings which blew away estimates of $.41. S&P is such a has been. These are the same guys who rated CMO's AAA. I think that is why it is down after the earnings report. We will make good money in OB. The 6.5% yield is rock solid and we may get an extra. WTM may buy them. They can do a big stock buyback and WTM will not participate thus the public float gets smaller. Is there some reason to stay public? They don't need capital. My guess-- they buy back stock, shrink the float and WTM buys them and only has to pay a few hundred million. Any stock buy back raises our book value as OB is selling at 86% of book.

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