Recent

% | $
Quotes you view appear here for quick access.

Stewart Information Services Corporation Message Board

fabulouspoodle 104 posts  |  Last Activity: 8 hours ago Member since: Apr 7, 1999
SortNewest  |  Oldest  |  Highest Rated Expand all messages
  • Reply to

    I decided to buy UVE

    by shrewd_curmudgeon May 4, 2016 9:32 PM
    fabulouspoodle fabulouspoodle 8 hours ago Flag

    I have never been short UVE, nor do I know anyone who is short UVE. I am not saying UVE is reporting earnings incorrectly. I am saying they decreased their Loss Adjustment Reserves for four straight years on an almost quarterly basis....and each time they decrease the reserve, it helps their earnings. This past quarter, the reserves decreased $14 million sequentially. This benefit cant continue much longer since the reserve has already dropped from $193 million to $85 million the past four years. Soon UVE will be reporting earnings without the benefit of a reserve decrease to boost eps. This will hurt their quarterly earnings.

    best.

  • fabulouspoodle fabulouspoodle 13 hours ago Flag

    happy, I guess you always hope for a decent company to be able to creep its way back to the buck level before having to do the reverse.

  • Reply to

    BOught back 461k shares in 3 months.

    by longtimefollower May 4, 2016 11:13 PM
    fabulouspoodle fabulouspoodle 15 hours ago Flag

    What are you talking about spanspur, do you even follow the stock? Geeze,management has told everyone in the December, and then again in the March earnings report and conference calls, that losses are expected throughout the year, and their are headwinds in the sector and the economy. That has been the major theme, and why the stock has such a low valuation.

  • Reply to

    I decided to buy UVE

    by shrewd_curmudgeon May 4, 2016 9:32 PM
    fabulouspoodle fabulouspoodle 15 hours ago Flag

    sc, imo, the liability is a reserve for losses or possible losses that come up now, but were incurred in the past. It makes no sense to me that the reserve has gone down dramatically every single year...even when policies have increased. If you look at all other insurers.....just look at them, that liability (the reserve) increases slowly as policies increase. Those other insurers are increasing their reserves in response to addtitional policy count. Each time they do that, their earnings decreases by the same amount. On the flp side, UVE has lowered their reserve every single year, almost every single quarter, by large amounts.

    Now, I think for whatever reason UVE was way way way over reserved four years back, and they needed to drop that number. I'm not saying they did anything wrong. At this point it is very low. They can't continue to reap the benefit of the reserves going down. And the benefit they are getting has nothing to do with the current operations. Just look at the numbers, That decrease is helping eps. In other Fl insurers, this same reserve goes up with policy growth. So this cant continue, imo.

    The liability 'Loss and Loss Adj Expense Reserves' in Millions:

    12/31/12 = $193.2
    12/31/13 = $159.2
    12/31/14 = $134.3
    12/31/15 = $98.8
    3/31/16 = $85.0

    Btw, I still think UVE is a good value, just not nearly as good as their earnings, which includes this benefit, shows.

  • fabulouspoodle fabulouspoodle 20 hours ago Flag

    nd geek, cherry pick? They are going through the Citizen fields with the biggest John Deere harvestor you can buy. Pretty sure they've bought more Citizen Policies than any other company each year for past bunch by far.

  • Reply to

    low for day to be $5.02

    by pjv2xyw9dww4b5 20 hours ago
    fabulouspoodle fabulouspoodle 20 hours ago Flag

    pj, hope so. I added a few at $5.03. Course, its not often I buy near a low that holds...so my guess is you'll get your shares, and I may add a few more in the fours.

    best

  • fabulouspoodle fabulouspoodle 20 hours ago Flag

    FNHC hasnt had a Citizen takeout in what, more than four years....five???? Thats because they stated five years back that the Citizens policies were higher risk and at the bottom of the barrel. HRTG started buying citizens policies hand over foot AFTER FNHC stated Citizen policies were junk and stopped buying.

    Sure, HRTG made a ton....but a lot of thats b/c they take on much higher risk policies without getting the correct return for them. So 98% percent of the time things look good. Until a Hurricane occurs, or until someone takes a look under the hood.

    And btw, UIHC has cut down to virtually nothing in recent years.

    HCI is like HRTG...they keep on with these Citizen policies and they have a poor portfolio of policies

  • ..on doing this summer. Otherwise metrics should get better for both emms and the industry.

  • HRTG...from the cc,

    They got killed on litigated claims in the qtr....evidently, a bunch of their policyholders decided to go after these guys. They were not prepared for this, and I dont believe its a one time thing. I never heard of any other insurer blame attorney representation and I've listened to Fl insurer conf call for lots of years.

    They believe it has stabilized but who knows.

    Sure, they could post a real strong numbers next qtr, but I think w/this management team they will #$%$ up at some point.

    The fact is, they have grown this company through #$%$ Citizen policies, which are riskier than most....b/c of older homes and they are more often in the tri-county storm prone areas. Heck, they just stated they are taking out another 20,000 Citizen policies.

    To combat this they filed for a 15% rate increase with Citizens. Sounds good, but it also goes to show just how awful their claims and adjustment estimates have been. I think they just filed for a 5% last year. In the longer run, will their policyholders stick with them with these increases.

    Yes, as they said, everyone is reporting filing for rate increases. But...none nearly a high as there own. Except maybe Citizens, the only carrier I know of with as risky a portfolio of policies as their own.

  • ....a 15% rate increase with the State of Florida for their Citizen policies (which is the vast majority). It shows you just how bad these buys estimated what their claims losses on these policies would be....their portfolio of policies is far more risky than they expected. Thats because they've been adding these bottom of the barrel Citizen policies willy nilly for the past five years. And they just stated they will add more Citizen policies this year.

    And will their policy holders stick with them with this rate increase, or will they leave for cheaper pastures?

  • fabulouspoodle by fabulouspoodle 23 hours ago Flag

    I own a bit. Good news is they were profitable, and mid to long term outlook looks decent. Bad news is they were only profitable because of a reversal of $273,000 in bad debt. Would have been just bout break even which aint too bad. And in the conf call, they make it sound like q2 will be softer due to lumpiness in sales...with some positivity after that

    best.

  • fabulouspoodle fabulouspoodle May 4, 2016 7:34 PM Flag

    well, I said this the day I sold half the first go round (although I was proven to be wrong next quarter, but got lucky the stock had fallen a ton).....and I have stated several times that I am leery about the repeatability of their earnings:

    I've sold half my position this morning....
    by fabulouspoodle • Dec 28, 2015 10:06 AM Remove
    .....in the mid tens. Obvsiously huge momentum, hope it heads higher. Have been averaged in as mentioned here, at just under six bucks after buying into their q2 earnings report starting in August....so grabbed the 75% gain on those shares.

    IMO, NAII deserves a somewhat lower than average p/e, due to its extreme customer concentration, and its history of lower valuation. And at current levels we are near a 15 p/e based on anualizing last quarters earnings. However, I don't think anyone has a real good idea on what next quarter will bring....it seems to me last quarter strength could have been more related to the lumpiness of their sales and one time ordering than anything else. So I do not expect earnings to increase sequentially, (I think it will decrease), while the share price seems to expect more earnings strength.

    Anyways, I sold half, and will sell more, probably all prior to earnings. I could be wrong, but certainly if NAII strength continues, I think holding into the December earnings report is risky. Flip side is lots of momo, so who knows.

  • Everyone expected the tornado damage. It was bad, but basically as expected. The problem was with issues nonrelated to this quarters weather.

    As they state in the pr. "the severe weather activity related to the tornadoes had a 6.7 percentage point impact on the loss ratio; actual development of prior year loss reserves in excess of expected development had a 5.5 percentage point impact; and reserve strengthening associated with prior year claims increased the loss ratio by 4.1 percentage points. These three factors had an 16.3 percentage point unfavorable impact on the loss ratio for the first quarter of 2016."

    So 41% of the negative impact to the loss ratio (6.7/16.3) had to do with the bad weather in the March quarter. The majority of the negative impact was due to with, as they explain later, adverse development in prior qtrs fo 2015....they are getting lots of claims for prior qtrs from their policies. And its so bad, that they say they have to increase their reserves by alot, because their estimates are so bad.

    Now, the stock is cheap...but this seems to show that either their properties have more risk than they thought (HRTG was picking up the bottom of the barrel Citizen policies at a willy-nilly pace), or their management teams aint up to it.

    Just an awful quarter, for reasons that will hurt earnings into the future, all imo.

    best.

  • Reply to

    Six days til earnings...

    by microcaptrader May 4, 2016 11:35 AM
    fabulouspoodle fabulouspoodle May 4, 2016 12:06 PM Flag

    I guess it would be a negative for Mexican manufacturers if Trump becomes president, b/c of the wall thing, and the apparent dislike of Trump by Mexicans. I dont think thats a meaningful thought...but its all I could come up with...

    ...and might add a few more.

    best.

  • Reply to

    Six days til earnings...

    by microcaptrader May 4, 2016 11:35 AM
    fabulouspoodle fabulouspoodle May 4, 2016 11:45 AM Flag

    why fret?...they just gotta build a wall and everything will be hunky dory. Oh, and no American based manufacturers are allowed to move operations there. Or there will be consequences. Meaningful consequences.

  • Reply to

    I decided to sell UVE...

    by fabulouspoodle May 3, 2016 11:19 AM
    fabulouspoodle fabulouspoodle May 3, 2016 8:13 PM Flag

    matsky, UVE stated in their conf call that they felt their reserves were 100% fine, and they explain in their 10K why they have lowered their reserves so dramatically. I'm not saying anything is wrong with what they have done. I am saying that because they have lowered their reserves steadily, on almost a qtrly basis, for the past thirteen quarters, from $194 million to $85 million, a total of $109 million, they have benefited an average of about $8.5 million per quarter (and $14 million in the just released March quarter) to their earnings for something that has to stop at some point soon. Can they lower their reserves under $85 million? I dont know. But it cant go on much longer. And when it stops, earnings will decrease by about $8.5 million per quarter.

    I'm not saying UVE is doing anything wrong. Just that this earnings benefit they have taken the past three years has to end. UVE may do well, and it still may be undervalued and it may do far better than FNHC.

    But, imo, you have to account for the reserve adjustment UVE is taking when calculating what sustainable are earnings are.

    best.

  • Reply to

    Opinions on First Q 2016?

    by scottr2958 May 3, 2016 5:43 PM
    fabulouspoodle fabulouspoodle May 3, 2016 6:44 PM Flag

    I think the quarter was very strong. Ex cat losses, (to see potential) they made .90/share after tax, and cheap on a price to book basis. Obviously, they beat the street, and continue to grow. I mean this quarter was 4.12% sequential growth, which is 17.5% on a annual basis....thats still strong policy growth after the huge growth of the past four years. And FNHC is super cheap on a book value basis.

    best.

  • I'm using FNHC to better explain my prior points regarding why I sold UVE. Of course the market may well disagree with me.

    FNHC $18.97 vs UVE ($17.32)

    FNHC just posted strong earnings, imo, of .68/share.

    FNHC took catastrophic losses of $4.9 million before tax, or about .21/share on an after tax basis. So ex cat losses (I'm not saying this is adjusted earnings...just a number to see potential), FNHC made .90/share.

    And as opposed to UVE which sequentially lowered its 'Loss and Loss Adjustment Expense Reserve' by $14 million from the December '15 quarter, to the March '16 quarter; FNHC increased it reserve by $4.275 million, or 4.2% in response to sequential policy growth of 4.1%.

    And, FNHC tangible book value is now $17.56/share. So, FNHC currently trades at only 1.08 time book value.

    Compare FNHC to UVE, and imo, FNHC fared far better.

    UVE posted .71/share (vs FNHC' .68/share), and ex cat losses, UVE would have posted .86/share (vs FNHC .90/share).

    The amazing thing is inclusive of those numbers, FNHC took a .19/share hit to its earnings to increase its reserves along with policy growth, while UVE lowered its reserves in response to policy growth, and UVE took a .24/share benefit to both reserves and net income. That benefit, imo, should be considered an extraordinary event.

    On an apples to apples basis, disregarding any sequential changes in reserves, FNHC made .87/share for the quarter while UVE made .47/share in earnings. If you look at earnings ex cat losses, FNHC made .99/share, while UVE made .62/share (keeping reserves flat).

    And UVE trades at about 1.95 times tangible book value, while FNHC trades at 1.08 times tangible book value.

    UVE does offer a far better dividend.

    Seems to me FNHC is a far better value. I am no accounting expert, and everyone should verify their own numbers. Please feel free to correct or comment re my methods of calculation.

    best.

  • Reply to

    I decided to sell UVE...

    by fabulouspoodle May 3, 2016 11:19 AM
    fabulouspoodle fabulouspoodle May 3, 2016 3:24 PM Flag

    guppy, UVE, in the past several years, has a history of having their earnings beat estimates easily. Perhaps one reason is that the analyst has not considered the earnings due to decreases in reserves as real sustainable earnings. Perhaps, if UVE no longer lowers reserves they will no longer be able to beat estimates as easily.

    Perhaps thats why the analyst lowered his '16 estimate recently below what it was last year. I dont know, you should look into it.

  • Reply to

    I decided to sell UVE...

    by fabulouspoodle May 3, 2016 11:19 AM
    fabulouspoodle fabulouspoodle May 3, 2016 3:06 PM Flag

    UVE has lowered the reserve Unpaid Losses and Loss Adjustment Expense by $108 million dollars over the past nine quarters. As I understand, that $108 million has been a boost to income over those same nine quarters, The reserve liability has decreases from $193 million nine quarters ago to a low of $85 million in the just reported March qtr on regular basis. It can't go much lower, right? So going forward, UVE will not have that added boost to earnings....which this quarter increased earnings by $14 million before taxes....just my lowering a reserve. Nothing nefarious. I am just saying this added boost to earnings that UVE has been achieving by lowering the reserve is not sustainable....imo, and as I understand it.

    best.

STC
35.48+0.10(+0.28%)May 5 4:00 PMEDT