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Old Republic International Corporation Message Board

bbarberayr 31 posts  |  Last Activity: Aug 21, 2014 9:19 AM Member since: Feb 26, 2007
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  • Reply to

    Some 10K notes

    by bengrahamman Aug 14, 2014 3:19 PM
    bbarberayr bbarberayr Aug 21, 2014 9:19 AM Flag

    It's still important to recognize this, especially when looking at the relative value of lifeco's.

    KCLI for example trades at a p/b of .65, but really is .69 when you strip out AOCI, so at a 13% premium to NWLI. And this is for a less quality company with lower ROE.

  • bbarberayr by bbarberayr Aug 21, 2014 9:04 AM Flag

    Anyone know if the Bank of America settlement for $17 billion includes the money ORI is suing them for?

  • Reply to

    Will it make a difference?

    by stillwater9999 Aug 11, 2014 4:10 PM
    bbarberayr bbarberayr Aug 17, 2014 8:19 PM Flag

    Even at the current price, buying back stock makes a lot of sense.

    Best for long term holder would be to continue to buy back stock as long as it a big discount to book and then implement a dividend.

  • Reply to

    Will it make a difference?

    by stillwater9999 Aug 11, 2014 4:10 PM
    bbarberayr bbarberayr Aug 14, 2014 10:41 AM Flag

    We had a company up in Canada EVT.TO which was basically the holding company for a guy named Hal Jackman. They paid a paltry $0.15 for years and no-one did anything about it.

    Hal retired and the son took over and changed the dividend policy to basically distribute all earnings to shareholders, which is much better.

    Jackman is 4 years older than Moody, so there is hope!

  • bbarberayr bbarberayr Jul 17, 2014 8:40 AM Flag

    I think Ross was selling because it is a time-dated fund and he needs to start raising cash. He's also been selling in OCN for the same reason (according to press releases).

    BTIG Research (google them, I can't post links in the message board) has been doing a really good job of following the bond market and likes AGO and has some good reports about their exposure, etc. You need to create an account, but it is free.

    The way I look at it is they cleaned up Alabama, Stockton, Detroit with very few losses (extending terms, refinancing, etc) and Peurto Rico should be similar. They have a lot of excess equity, so could easily handle some losses here if needed.

  • Reply to

    Run Away!

    by dsouth7777 Jun 18, 2014 3:57 PM
    bbarberayr bbarberayr Jul 1, 2014 11:46 AM Flag

    Pure vanilla insurance and annuity company.

    Read their SEC filings - they detail their business and the expected yield on their outstanding bond portfolio.

    Of if you really want to dig in, read their insurance statutory filings. They have the full gory details.

  • Reply to

    Run Away!

    by dsouth7777 Jun 18, 2014 3:57 PM
    bbarberayr bbarberayr Jun 22, 2014 9:39 PM Flag

    chiefned, NWLI has a controlling shareholder who does not want to sell, so no comparison.

    dsouth, NWLI is making good profit with low rates. Higher rates, assuming they come, will only help, but even without these, the business is good.

  • NIce writeup on seeking alpha. Nothing really new for most of here, but hopefully will get some more attention for the stock:

  • bbarberayr by bbarberayr May 12, 2014 4:23 PM Flag

    Forbes also recommended ORI recently with an article titled:

    Old Republic International Named Top Dividend Stock With Insider Buying and 4.36% Yield (ORI)

    So, it appears, after year of getting things in order in obscurity, the mainstream media is starting to recognize ORI. Still about 25% undervalued compared to its peers on yield, p/e, p/s basis, so this could give the push to the next level.

  • The one thing I noticed in the quarterly this month was the lawsuit with the $!50 million in exemplary damages was denied review by the Supreme Court and is now completely over. SO, even though the odds of anything close to this actually being paid were very small, it is still nice to have the risk completely gone.

  • Reply to

    Portfolio strategy update

    by pmlljl Apr 25, 2014 4:56 PM
    bbarberayr bbarberayr Apr 28, 2014 9:12 AM Flag

    Thanks for the update. Good work on the Amazon short - that's been a tough one to get the timing right.

    My thought is we are going through a mid-cycle slowdown, which could last 1 quarter or several quarters. This will be followed by rising rates and an economic re-acceleration. The stocks we will want to own during this period will not be the mo-mo stocks of 2013, but larger, value oriented stocks and late cycle stocks like energy and other commodities. We'll see as every cycle is different, but to me, it seems we are more in a period of rotation than the end of the bull run.

  • Reply to

    Annual Report - Yield on new Investments

    by bbarberayr Mar 18, 2014 8:36 AM
    bbarberayr bbarberayr Mar 26, 2014 10:12 AM Flag

    Sent this message over to David Merkel and he replied on seekingalpha. David is an ex-actuary and now fund manager who is the smartest insurance investor I know and he likes NWLI still.

    DOsn't seem like you can post links here, but go take a look.

  • bbarberayr by bbarberayr Mar 20, 2014 2:01 PM Flag

    Well, the conference call didn't say much.

    The last earnings release showed that it's equity was around $0, so hopefully not too much capital will be required and he did say that he expects to make this capital back over time. SO, doesn't sound like the dividend will be hit.

    So, not sure why they did this, but hopefully as the housing market continues to improve, RMIC can become a viable business again.

  • Reply to

    If Book Value was recorded at Fair Value....

    by bengrahamman Mar 18, 2014 3:27 PM
    bbarberayr bbarberayr Mar 19, 2014 2:09 PM Flag

    You are correct. I just used the regular Class A share count, but I should include the B shares too.

  • Reply to

    If Book Value was recorded at Fair Value....

    by bengrahamman Mar 18, 2014 3:27 PM
    bbarberayr bbarberayr Mar 19, 2014 12:56 PM Flag

    On the balance sheet on page 84, you'll see the assets that are held for sale are carried in the balance sheet (and therefore book value) at fair value. The securities held to maturity are at amortized cost. SO, in this case, the increase in book value would = 6,656,144 - 6,510,320 = $145,824, so a book value of $440.82.

    Similarly on page 149, you can subtract the Balance Sheet Amount from the Fair Value of their portfolio and get the same amount.

  • Reply to

    Annual Report - Yield on new Investments

    by bbarberayr Mar 18, 2014 8:36 AM
    bbarberayr bbarberayr Mar 18, 2014 12:18 PM Flag

    None. All I did was look at investment income for the year and pro-rate it to annuity payout. It is a very gross approximation, but I would expect that the income from the call options should basically offset payouts due to increasing markets.

    I could be way off on this, but it does show the leverage they have to higher rates.

  • From the Annual Report:

    "The yield on debt security purchases to fund insurance operations rebounded somewhat to 3.53% in 2013 from 3.37% in 2012 but was still below the 4.18% yield attained in 2011."

    So, investment yields improved, but are still down. Their unrealized gains in securities dropped from $541 million to $146 because of this, so this part of the "hidden value" in the shares went down.

    But if rates can get back up to that 4.18%, a quick calc says that would cause annual earnings on their $9 billion investment portfolio to increase $58 million. If 2/3's of this is creditted to annuity holders, it leaves $19.5 million before tax for shareholders. 32% tax from 2013 gives after tax earnings increase of $13 million or $3.57 increase in earnings per share.

    If we could get yields back up to 5.5% like they were a few years ago, using the same calc would give an incerase in EPS of $9.38, or a 1/3 increase in earnings.

  • Reply to

    is NWLI book value its intrinsic value?

    by denniscloeser Mar 17, 2014 7:11 AM
    bbarberayr bbarberayr Mar 17, 2014 11:11 AM Flag

    The statutory reports listing all investments in full detail are on their web site. I don't see anything unusual that would account for that (but it is 50 pages, so perhaps I missed something). It really just looks like standard bonds and mortgages.

    I suspect Bear Sterns was talking about the way they used amortized cost instead of market value for their investments resulting in assets and book value being understated.

  • bbarberayr by bbarberayr Mar 8, 2014 8:49 AM Flag

    Nice writeup in Barron's on Met Life and the life insurance industry this weekend. Hopefully will drive more interest for NWLI as well.

  • bbarberayr bbarberayr Feb 23, 2014 8:00 PM Flag

    Thanks for posting - good summary of NWLI.

    Let's hope it starts increasing interest in the stock!

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