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Assured Guaranty Ltd. Message Board

bbarberayr 11 posts  |  Last Activity: Jun 27, 2016 2:30 PM Member since: Feb 26, 2007
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  • bbarberayr by bbarberayr May 5, 2016 2:29 PM Flag

    Earnings a bit weak for Q1. There was a minor lawsuit hit (which they are appealing), but likely the bulk of the decline was due to lower investment returns, which we will need the full financial reports to verify.

    Interesting quote in the press release:
    "There is clearly a great deal of uncertainty in the financial markets which may be manifested through increased levels of volatility. The timing and the future direction the Federal Reserve may take on interest rates adds to the level of uncertainty. This backdrop is a challenging one for the life insurance industry and, in this context, tests our ability to generate growth."

    If they really believe this, it helps build the case that they should look at capital management ideas. The stock repurchase idea would be the obvious way to generate EPS growth per share.

  • Since Thursday's close NWLI outperforming stocks like MFC, MET and AEG by 10% - 15%.

    Probably most holders are longer term in NWLI and more short-termers in the bigcaps playing the rate rise.

  • bbarberayr by bbarberayr Jun 1, 2016 7:37 PM Flag

    Looks like the deal for Chinese insurer Anbang to buy FGL is having some problems. Maybe it is just a hiccup in this process as Chinese companies aren't used to dealing with US regulators, or maybe they want to walk away.

    I'd like to see the FGL deal go through as it increases the scarcity value of life insurers and will make it easier for stocks like NWLI to go up once the interest environment turns.

  • bbarberayr by bbarberayr Jun 7, 2016 3:33 PM Flag

    Reads to me like the son is putting things in place to better run the business and reward shareholders:

    "While we do not currently have any specific
    plans in place, the presence of NWLGI will
    facilitate strategic initiatives going forward
    such as forming new subsidiaries for business
    opportunities, acquiring other businesses, and
    providing for corporate finance and capital
    management levers."

  • Reply to

    Another Day, Another Downdraft

    by dsouth7777 May 10, 2016 3:19 PM
    bbarberayr bbarberayr May 11, 2016 9:54 AM Flag

    dsouth777, run a compare chart of NWLI again other life insurers and you'll see it is an industry thing, not a NWLI specific thing. ON most timeframes, NWLI is one of the better, if not best, performing stock.

    Life insurance is down, because people are worried about low rates and what happened to the Japan insurers when their rates went really low. When rates form up, they will all rise.

    And you can't say they should be doing better like the P&C insurers as that is a completely different business and valuations are different.

  • Reply to


    by bbarberayr Jun 7, 2016 3:33 PM
    bbarberayr bbarberayr Jun 8, 2016 8:59 AM Flag

    With the company re-org, they are in a different spot now:

  • Reply to

    Failed Strategy

    by dsouth7777 May 13, 2016 10:22 AM
    bbarberayr bbarberayr Jun 2, 2016 12:41 PM Flag

    ANAT is different because of it'sP&C business and P&C valuations have rebounded much better than life valuations.

    They still have the Moody discount, but their 2006 p/b of 0.9 has only dropped to a p/b of 0.7. Other pure P&C companies have rebounded better.

  • Reply to

    Failed Strategy

    by dsouth7777 May 13, 2016 10:22 AM
    bbarberayr bbarberayr Jun 2, 2016 9:07 AM Flag

    I agree, they are the cheapest. And there are reasons for that like the multiple vote shares, Moody poor capital management, etc.

    But these same issues have always existed and are the reason people have been able to buy shares so cheaply over NWLI's lifetime.

    If you look instead at the ration of a stock's P/B in the last cycle to now, the ratio's are pretty much in line.

    Eg. LNC 2006 p/b = 1.53, now 0.75
    MET 2006 p/b = 1.4, now 0.66
    NWLI 2006 p/b = 0.91, now 0.48

    So, the valuations have stayed in the same ratio with the industry over time.

    At some point, maybe in our lifetimes, the Moody's will change capital allocation policies or one of the heirs will want out or something, so there will be a 1-time winfall for the holders at that time as valuations move to more in line with the industry, but for now, the company is being run as it always has and valued as it always has, so we just have to trade with that in mind.

  • Reply to

    Another Day, Another Downdraft

    by dsouth7777 May 10, 2016 3:19 PM
    bbarberayr bbarberayr May 11, 2016 12:53 PM Flag

    dsouth7777, you really are missing the main themes here. You are picking on NWLI for industry issues, not company issues. I agree there would likely be a 1-time valuation rerating if things happenned like getting rid of the dual share structure, increasing the dividend, but these factors were in play 10 years ago, and it is why the shares were cheaper than most life insurers then and now. I will try and explain 1 more time.

    A 10 year chart comparing NWLI to MET, PRU, MFC and KCLI show NWLI at the top., so the company is doing as well or better than the industry or it would be worse.

    MET had a p/b of 1.4 in 2006, now it is 0.6, so 43% or 10 years ago
    NWLI had a p/b of 0.9 in 2006, now it is 0.5, so 56% of 10 years ago

    So NWLI has actually shown less loss in market value than large cap MET, another sign that it is being run well.

    You can say they've produced a loss over 10 years, but the so has pretty much every other life insurer, so saying NWLI are "fools" is incorrect as they have increase book value significantly and the valuation discount is outside their control as it applies to all other life insurers as well.

  • bbarberayr by bbarberayr May 11, 2016 12:55 PM Flag

    Did a search of the Panama Paper Leaks and no NWLI in there. Wondered if some of their offshore insurance sales would have gotten caught up in people trying to avoid taxes, but at this level, they have not.

  • Reply to

    Failed Strategy

    by dsouth7777 May 13, 2016 10:22 AM
    bbarberayr bbarberayr Jun 1, 2016 7:33 PM Flag


    Take a look at either stocks. Pretty sure that there is not 1 life insurer who is worth more than they wore 10 years ago. It is not a management issue unless coincidentally all life insurers hired poor CEO's in 2007.

    The reality is the valuation that the market is willing to pay for life insurers has gone down over the last 10 years due to fears about interest rates, etc.

26.87+0.20(+0.75%)Jul 28 4:03 PMEDT