So, my suggestion is that instead of your trying to get others to buy the stock and thus increasing the price for you, that you be in front and buy as much as you can to take advantage of the increase that is imminent. Even if you have to mortgage your house and borrow from your retirement.
Based on the preponderance of evidence, I would have to say that unbiasedviewpoint is pretty right on and those that do not believe this entity is not in deep doo doo and highly unlikely to survive, would be the ones providing the refuting evidence that is plain as day. A few poster here are essentially repeating information from what the company has published, marrying it with the past actions and are very credible. Then there are those that say no problem, it is all behind us and BBSI is extremely solid with nothing really to back it. I think you should go read their 10Q again.
Do you realize that the company is already insolvent if you remove the "goodwill?" And if they have not fessed up to all their losses...? I really have no sympathy for current investors. They all have their eyes open and they should not be a bit surprised if, in 6 months they are holding zippo zero.
Well, you are wrong and I believe very wrong if you believe this is a viable entity anymore. The fact is (and you can verify this with the DOI or the NAIC easily), if this was a "real" insurance company that was regulated as such, it would have been shut down years ago as they were too leveraged for the conservative standards that is set forth in statutory accounting. And they would have had to actually disclose their insurance premiums and losses. BBSI has been able to avoid regulation so could get into this mess.
No, but I talk to the agents who have placed business with BBSI. So who is making up stuff? You know many people when they have no argument attack the messenger. That only helps defeat your message.
More like a bug in the rug. I follow workers compensation issues and talk with agents and brokers all day and the agents are scrambling. They think their E&O may be on the line for recommending the lowest cost (by far) leader for accounts that most insurers except for the state fund would not even insure. I do not trash. I try to provide a objective observations related to workers compensation insurers. Call some of your favorite insurance agents and see if this is true.
The latest out is the California branch that regulates self insurance funds id taking a look at the reserves and will probably ask for more collateral. A whole lot more.
And by the way, those insured by BBSI are trying to bail, but so far, they are expecting the true insurance market to match or come close to BBSI pricing, but insurers are not biting. As a matter of fact insurance companies are distrusting any company that was "insured" by BBSI and with few exceptions, the State Fund at really high rates is the only market they can go to, so they are stuck for now.
Does anyone know what their goodwill relates to? At this point, their tangible net worth is less than zero. Accounting rules say if the goodwill is not valuable anymore, they are to write that down or eliminate that, too. Goodwill is the "excess" over book value that a company pays to purchase another organization and if that organization's profits (however integrated into the company) is not panning out, they are required to write it down. See what Tower Insurance had to do when they "discovered" they were under-reserved. Personally, I believe, the management actually believes they are now conservatively reserved while their independent actuaries know better. They came to a compromise this quarter, but the auditor must audit and sign off for the full annual. There will probably be huge fireworks and I would not be surprised if BBSI fires their auditor. I expect a delay of the final annual numbers. I also do not expect Wells Fargo to throw good money after bad and loan them a ton of money. I do not have any problem with those that want to follow management down with the ship, but this is not a viable long term deal.
The main reason banks have covenants is for security, not the fees, though they will gouge you there, too. This next step will be to shore up and collateralize the WF money. That may mean they will not be able to pay claimants first and actually backfire. But I would guess that WF will not advance them more money. They will try to make sure they get back what they already loaned. They now have their tail in a crack.
So if it was waived and is to be recast by 12-31-14 would they not have put that also in the 10Q? If it has been, where is the evidence?
I think the point is they disagreed with the reserves. I think they actually have and still believe their BS. Just put the top people in their organization on the stand and they will not even need to assert stupidity. The jury will figure it out really quickly.
Agree with a couple points. I doubt they knew they were is such a hole and I think they still believe the actuaries are way off. I don't know if you remember a workers compensation insurance company in the late 90's where the actuaries (including their own) advised they were severely under reserved andtheir reactio was to fire the actuaries. Later, the Dept of Ins discovered they were under reserved by at at least 1.6 billion (now proven to be a lot more in runoff. Those execs used the stupidity defense, also and got off. Even after it all, they still did not believe the actuaries and think they were railroaded. I think these non insurance people who run this company are also clueless and believe they have more than adequate reserves and will benefit greatly from the stupidity defense. I think from all the lawsuits, the lawyers are smelling money and will get a payoff, but it will benefit only them. As usual.
It is HIGHLY unlikely that BBSI is underreserved. Actuaries usually look at the numbers in a few ways and come up with high low and middle ground. Management can pick what they want within that range and still get their auditors to sign off that it is reasonable. A company in a downward spiral, especially one with eternal optimism, will not pick the conservative reserve. Usually it is the most aggressive one their auditors will allow. And guess what, it almost always is not enough. My prediction is they are at least 40 mil off, still. We will see if their auditors make them put more up in the last quarter of the year or if they will be convinced they can hold off a little. They are between a rock and a hard place (the audit company--which I think is Moss Adams, a smallish regional firm based in Washington--not a WC hotbed--If they require too much from BBSI and they can be blamed for BK, they are in trouble, but if they let mgmt. go hog wild, they are also in trouble with everyone else. They need a defensible position, but not one too conservative that would put BBSI out of business completely.
Department of insurance website has premiums by line of business. It might take a bit of searching, but I have seen it in the past. I believe AmTrust has been licensed and writing a smidgen of comp in CA for at least 10 years. It has only been the last couple years where they have grown like gangbusters. They wrote 444M in WC with a state loss ratio of 50% in 2013. 184Mil the previous year with a 51% stated loss ratio. I suspect they will be quite a bit bigger in CA for 2014, but we will not find out until May or so of 2015 unless they tell us.
I do find it interesting that there is a whole lot more interest by ambulance chasing attorneys than your typical stock. I tend to follow insurance stocks so when Tower went down the first time there was about 3 firms and SeaBright as many as five. This has salivating dogs coming out of the woodwork. I wonder why? I think, other than taking a few million in lawyers fees (in total), they will come to nothing.
I am now thinking that the management may be believing their own BS and that is why they are buying. They think that the actuarial firms are being way too conservative and the will get it all back. I remember the days back when Fremont comp had to put over a billion to reserves. Mgmt there were totally convinced that the actuaries were liars but guess what, it wasn't enough.
Usually these nuisance lawsuits are settled rather than fought. The reason for that is if they allow them to go on, the discovery will get into areas the management do not want public whether or not it pertains. The lawyers know that. They usually get settled where the shareholders get nothing or next o nothing and the lawyers get a payday. Expect the total cost to be between 1 and 2 mil.
So with this recent announcement of a new CFO, I went back and looked at press releases. EIG seems like they completely cleaned house except for the CEO(?) In 2014, they have a new head of underwriting, a new head of policy services, a new head of claims, a ne head of IT infrastructiure and a separate new head of IT, They also hired about 3 regional heads of sales. Ok what did I miss? Did they clean house and start over? Now they are hitting on all cylinders? Or is it that everyone quit and they had to find replacements. I am just puzzled.