Old Republic International Corp. Message Board

batraa and melissy:

I spent some time googling the reported NWLI real estate sale and I think that you are probably correct. I relied on the fact that a major newspaper in southern California, "The Orange County Register", reported the sale as a NWLI transaction. It was really messed up and I never found any concrete evidence as to who sold the property. However, NWLI makes no mention of it and I could find no place on NWLI's balance sheet where the property could have been listed. Therefore, I am giving up. Finally, the media really failed in this case.

batraa;

Please Google search "National Western Life Insurance Company sells Bixby Office Park to Parallel Capital Partners" for a very brief story about the transaction.

We still do not know when NWLI bought the property or what they paid. We also don't know if there was a loan on the property or how much NWLI depreciated the property so we can not really even guess at the amount of gain or loss. If there was no loan, NWLI should have received a lot of cash. In addition the 10q, which is now available, said that there were no "subsequent items" to report. So it is just a big mystery to me.

amit74b:

No it was not AIG. I don't follow AIG. NWLI sold real estate in California for $85,000,000 which was reported in the media in February 2013.

batraa:

Throughout its history, AMZN has failed to make any serious amount of earnings. Look at its balance sheet figure for retained earnings. It is pitiful. The real trick in business is to make profits, not just sales. Anybody can make sales at a loss, particularly if you have the advantage of not having to collect sales tax as your competitors must.

And while your analyzing AMZN's retained earnings, figure out what it would be if AMZN wrote off all of its intangible assets. Those assets only have value if a company makes profits in excess of a normal company. AMZN has made hardly any accumulated profits over its entire history. It is pathetic. The market is as wrong
about AMZN as it is about NWLI. I own a lot of NWLI and not any AMZN, and I am doing quite well. I guess that makes me a fan of the Moody's and a critic of Jeff Bezos.

batraa:

Well the market is filled with incompetent investors. Why shouldn't some of them be buying stocks like NWLI instead of AMZN. My comparison of NWLI to AMZN is really to point out the insanity of AMZN's price and to show that NWLI's price is just ridiculously low compared to any stock in the market. Lets see what happens when the next earnings report comes out. I expect a very good earnings per share figure boosted quite a bit
by the real estate sale in February.

pj:

Yahoo! reports that AMZN lost money over the last 12 months so it has a negative p/e ratio.
AMZN also has a book value of less than $20 per share which includes a good bit of intangibles.
I would contend that because AMZN is not profitable, its intangible assets are actually worthless.
Therefore its book value is overstated. If you said that its real book value was $15, then it is selling at about 16 times book value with a negative p/e. If NWLI sold at 15 times book, it would be priced at about $6,000 per share. From this admittedly rough analysis, I conclude that we can safely continue
to squeeze the shorts for a little longer. Turn the screws another quarter of a rotation please.

bbarberayr:

Yes, it was ironic. If my posts made the stock go up $4 or $5 per message, I would be writing all day long. No such luck.

bbarberayr:

I would not call my message a threat. I am a peaceful person. I would call it a warning that they have made what will be a very expensive mistake if they do not close their shorts.

I learned this morning that the Value Line Investment Survey has American National Insurance Co. (ANAT)
ranked number 1 for performance which probably accounts for some of the increase in ANAT's share price.

batraa:

Yesterday ANAT reported earnings for the 1st quarter of 2013. ANAT earned $2.23 including capital gains. So, simply by multiplying by 4, it may earn $8 to $9 per share this year. Just a guess. Maybe some investors expected an improvement was coming and bid up ANAT in advance.

batraa:

The reason for the move in ANAT is a mystery to me. When it had that sharp drop late last year, I was a pretty big buyer. I bought a good bit at $64 and change in my IRA which I have since sold in the low $80s.
However, I don't know why it went down or why it has now gone up. I think it is because people are crazy.
I simply try to buy good stocks at very low prices and hope for the best.

batraa:

Check out what ANAT did today. ANAT is my second largest position behind NWLI. I sold some ANAT today around $90. I am trying to decide if I have the nerve to buy even more NWLI. My portfolio is NOT diversified. At current prices the p/e ratio on ANAT is almost twice the p/e ratio for NWLI and NWLI is still less than 1/2 of book. Mighty tempting. In addition, I think NWLI will have a fairly material gain on the sale of real estate in California in the first quarter of 2013. That could spark another rally like we have seen after the last two quarterly reports. I don't know when NWLI bought the buildings or their cost or whether they had any loans on the properties. If the property was unencumbered, NWLI will receive a large amount of cash to reinvest.

sean_erickson2000:

I appreciate your theory about how NMLI's price is determined based on an expected return on equity. However this is not always how prices are determined. Please look at the financials of AMZN and CHTR and explain to me how they are priced based on their return on equity. I prefer to believe that the current market is irrational as to how it prices insurance companies in general and NWLI in particular. I personally do not think the era of ultra low interest rates will last forever. I should also point out that a 5-7% roe is quite generous compared to the returns on government securities, CDs, and money market funds.

bengrahamman:

Yes, I think the shorts were asking for it. NWLI got down to $125 where it was selling at 5 times earnings and about one-third of book value. They must have thought NWLI was going bankrupt. I owned a lot of NWLI and I bought more at $158.50 the day before earnings and more still the day after earnings. I wanted to help teach the bears a lesson. I think that some of the bears got the message today but there are still more to convert.

I did a Yahoo search about the Bixby Office Park Sale on Yahoo and it appears that the sale took place in February of 2013. My GUESS is that the sale would result in a pretty good gain but I have no idea of the amount. If my assumption is correct, NWLI may have a nice gain to add to the operating results for the first quarter of 2013.

bbarberayr:

Yes, almost a 20% return but that is based on the market price of the stock. If you use book value to calculate the return, it is more like 7%. That is a big difference. 7% is not bad in this low interest environment where 10 year t-notes yield only about 2%. The real difference is that you could buy the stock at less than 40% of book value.

Even today the stock is selling at about 45% of book value and 6.5 times earnings. Why shouldn't it sell at ten times earnings at least?

Today many other insurance companies had good price increases and the reason given by market pundits was tht the good jobs report caused an increase in interest rates. I hope it is the beginning of a trend. Bernanke has punished savers for too long. NWLI is my largest position and I am counting on a new high Monday.