Thanks for all your discussion and analysis work on NWLI. Was good reading and well thought out.
Well, that is interesting!
Wonder if Robert Moody is getting ready to step down in general. If so, maybe some of the discussion we've had here about being more shareholder friendly may come through for NWLI.
I still think of NWLI in a simlar vein to EVT.TO, where EVT.TO was a long term insurance and holding company with a minimal dividend, but when daddy stepped down, junion increased dividends and sold half the company to increase value.
Probably just to take advantage of the same things most companies do:
"The State of Delaware is a leading domicile for U.S. and international corporations. More than 1,000,000 business entities have made Delaware their legal home. More than 50% of all publicly-traded companies in the United States including 64% of the Fortune 500 have chosen Delaware as their legal home."
NWLI Was up 20% last year, so much better than the market. Off to a weak start this year, but probably just following the market with some profit taking from last year's win. I think we have another market beating year in 2015.
But good luck - hope it works out for you
I agree. Mine too. Plus, there is a reasonable chance rates finally rise this year, which would provide a tailwind for the lifeco's.
NWLI hasn't gotten into trouble with their bond portfolio since I've been following it for the last 10 years. They are very diversified and conservative. I guess if it was going to happen though, it would make sense that would be with the energy companies given NWLI's Texas location. But I really, really don't think it will turn into an issue for them.
Market even recognized it and bounced when earnings came out.
The volume has actually been good (for NWLI) in this latest uptrend the last month.
Perhaps these 2 factors are showing the market is getting more interested in our well-run, value stock.
Could be a lot of reasons and you'll never know.
Could be a fund building a big position; could be sentiment changing on interest rates; could be someone trading out of a more expensive insurer; could be a persistent seller is finished; could be some inside news on earnings or a takeover (unlikely but possible)
I think the thing to focus on is it is an inexpensive, well run company in a market where there are fewer and fewer of these, so the price generally should go up.
If you've priced your insurance based on those rates, then it absolutely makes sense. N o-one know for sure what rates will do and NWLI is in the business of making money on insurance and not on speculating on interest rates.
I believe it is more the Ebola scare making investors think air traffic drops and hurts stocks like FLY.
Look at stocks like DAL for example.
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.
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.
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!
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.
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.
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: