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Tower Group International, L.Ş. Message Board

  • momobanks07 momobanks07 Nov 24, 2013 8:17 PM Flag

    Share Price On Monday...I Believe

    So....Finally the numbers have been agreed to by all that needed to sign off. I believe that the newly published balance sheet is about as conservative as ANY insurance company currently publicly traded. I believe that the actuaries....(how many looked at them...3?... the in-house, the independent, and the accountants) have looked at the numbed with a high power microscope. In the face of all the lawsuits threatened...there is NO way that the actuaries or the accountants are going to be embarrassed with additional deterioration in the loss reserves. Further, the accountants know that all of their work will be completely scrutinized by the attorneys looking to hit their E&O coverage. Therefore, I believe that the numbers for once are a accurate reflection of the financial position of the TWGP. Consequently, I believe that the shares should trade on Monday at between 70%-80% of tangible book value. There is no reason why this wounded company is any worse than the others that have come before it. I expect the stock to trade between $5.25 and $6.00. When you take into account that the shorts should/will want to cover at some point, it is my opinion that it will trade in the upper end of the range. Anyone....Please tell me where my thinking is wrong.

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    • Still no Q2 10Q report filed?

    • Earnings

    • I can give you at least four reasons.
      1) You are ignoring losses for September and December quarters. It seems reasonable (although not assured) to assume that reserves are o.k. but their expenses will be very high and bookings low.

      2) Management credibility. They were very smooth before any problems were brought into the public sphere. Would encourage you to read some of the old transcripts and review investor presentations on their web site. They were pretty optimistic when share price was at $20 a share. Why would you trust them now?

      3) CEO. CEO who sold shares at $10 a share is still there. He is in full control of the BOD and there does not appear to be someone new coming in.

      4) Breakdown in internal controls. Normally, I think internal controls warnings are really not too concerning but it will take years, lots of expensive investment, and a totally new management team before this is really under control.

      5) Legal costs. They say that the costs cannot be determined and the lawsuits will fail in any event. Do you really believe that? Also, how come they have not indicated what their D&O insurance is?

      6) The thing frequently didn't trade at book value when times were supposed good so why should they now?

      • 1 Reply to cohsgrad
      • Please eliminate this one from your list. It was a predetermined sale to pay back a loan, that sale was coming if the stock was $5 or $50. Yes the CEO is still there, but saying he sold as a reason it is bad news is just false.

        3) CEO. CEO who sold shares at $10 a share is still there. He is in full control of the BOD and there does not appear to be someone new coming in.

    • swp3 Nov 24, 2013 10:33 PM Flag

      Definitely agree that we had positive news, but I am thinking $4.50 area. Hope you are right though!

    • Lets wait and see.