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American National Group, Inc. (ANAT)

NasdaqGS - NasdaqGS Real Time Price. Currency in USD
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113.21+0.65 (+0.58%)
At close: 4:00PM EDT
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  • M
    Money
    Anyone here? Book Value increased to $240 / share and the stock is trading around $92. They had a good quarter and yielding 3.5%.

    Can anyone help give some insight to the drastic discount to BV?
  • J
    JB
    The lack of shareholder/fiduciary thinking is caused by the management team and board. Neither have the training or exposure of different companies or industries to manage a public company. The previously raised point about insider holdings is exactly on target. Thankfully they aren't destroying value they just aren't creating it to the degree they could. There are likely a lot of undervalued assets or strategic opportunities that someone will eventually cease. If you look at the insider trades (SEC EDGAR site) the last one was a sale by an EVP for a little over 100 shares that left him with zero - nil- nada direct holdings. If you look at the NEO's there shareholding are a pittance - even if they got them from options - which is not the case today based on comp disclosures. The low shareholding are a testimony of the little value they place on the efforts of the management team (including themselves) and the board. But that is to be expected when there is no external evidence of new blood with no new ideas, no risk appetite, no performance based culture or no critical strategic thinking.

    I'll bet we see it again with the same board nominees - no new blood, no new ideas, no diversity, no strategy

    I also expect to see it again with the annual report - last years was paying homage to the past when they were successful. They disclose more about history and two or three generations ago than they do about current business or the future.

    ANAT is a play about the future. Eventually the stock held by the one trust gets distributed to the Moody Foundation and charity. The charity will need to diversify and will start to sell shares. The foundation will likely need to sell or dispose of shares to follow ownership rules for foundations. The company wont be buying back shares because it will take strategy and planning - see above

    Things will change especially if an activist offers 50% premium to current value. The fiduciaries of the trusts and foundations wont be able to vote No and escape the wrath of the other shareholders and the regulators or AGs that monitor charities.
    Neutral
  • I
    InvestingThought
    Apparently they included some March data in the dividend press release. Funny how they just skipped the usual earning press release entirely and have not yet filed the 10-Q. Makes you wonder what is going on - particularly with the drop in the stock price.

    I agree with comments that much of the increase is likely MTM but we will need to wait to see the 10-Q to do any analysis.

    What strikes me as odd is the structure of the LTI from the proxy and the relationship to the MTM. Eventually management in the LTI plan will figure out they have big volatility exposure to the stock market. They win or loose based n something they don't control but they haven't noticed (yet). What a "normal" company might do in this circumstance is increase the dividend payout, which has not changed in a few years, declare on extraordinary dividend or do the buyback someone suggested.
  • J
    JB
    From just filed Form 10Q
    We are currently evaluating the renovation and modernization of our home office facilities. This could result in capital expenditures that could aggregate to approximately $100 million over a three year period beginning in 2021. To date, the economic disruption relating to the COVID-19 pandemic has not caused the Company to lower or delay anticipated spending on capital investment projects. There are no other unusually large capital expenditures expected in the next 12-24 months.

    Amazing, they are thinking of spending this money to "improve" a white elephant built on a sand bar that science says will be underwater before the building is fully depreciated! No one is in building now because of Covid19 and they dont think delay is in order!!!

    They are planning on taking money earning investment income and shift it to a non earning asset. Any director voting for this deserves a NO note on next proxy. It wont mean anything because they obviously arent acting like fiduciaries of the company or its shareholders.
  • I
    InvestingThought
    Just getting round to reviewing Q1 10-Q. I did not see any explanation for the Earnings in Unconsolidated Affiliates of $40,460 in the notes or the MD&A. Did anyone see details I might have missed? This is a BIG chunk of both earnings and cash flow. I am trying to understand if this is at all sustainable??

    Also I looked at the investment income considering the dip in rates. Bond and mortgage loan income looks OK; dividends are down. Wish they would include disclosures about why - is it getting into riskier stocks with no dividends or something else. The item that gives me concern is the income from real estate. ANAT has a $600 million investment and yields in the low single digits about 2-3%.

    What amazes is the gap between this low yield investment and the target for the LTI. Eventually management team members will wake up to the fact that they have a 6% target but on a large chuck of assets they are earning much less. This creates a burden other assets need to carry in a low rate world and with commodity products. No wonder they didn't score the expected LTI payout. The question for us as shareholders is trying to figure out if management isn't executing well or if the board just doesn't know how to ask the right strategy questions and get answers that make sense. The best thing to do would be to sell the low yield assets and do a stock buyback with proceeds.
  • P
    Paul
    Joe:

    You said you covered your short 8 days ago according to your Yahoo post when the stock was about $107-$108 and today
    it is $113. Did your covering mop up all the surplus stock that was driving the price down? Did you also go long and are those trades driving the price up? Are your thousands of followers on social media also trading ANAT based on your actions?
    Would you be willing to provide me with tips on timing stock trades?
  • J
    JB
    I don't believe the foundation has not given away any shares since there is no SEC filing relating to changes in ownership (check EDGAR). foundations need to give away so much money every year to comply with tax laws so what will be donated is likely cash from dividends the foundation gets from owning the shares. So I don't think there will be any liquidating in the near term.

    I think the best point has been made by Joe when he said "if they have a plan"
  • J
    JB
    After looking through the 10-Q I learned that not much has changed at ANAT. In many instances if not practically all the words are the same they just insert new numbers. The MD&A reads like a math exercise in subtraction with virtually no Why or How - almost completely devoid of discussion or analysis.

    In an attempt to determine underlying value I started with GAAP equity and the stock price at Dec 31 and Sept 30 and while BV per share is UP - stock price is down! At 12/31 the stock traded at 65% or book; at 9/30 it was 57% of book.

    The value of the equity investment portfolio is up over the nine months and they even took some realized gains. I subtracted the after-tax value of the equities from GAAP BV and recalculated the stock price as a % of BV. (I subtracted the per share value of the after-tax value of the investments from the stock price assuming 100% of that value is embedded in the share price.) This yielded a stock trading at 44% of adjusted BV at 9/30 and 54% at 2/31/18!!!

    This company is so overcapitalized they could double the dividend and pay the increase by running off the equity portfolio over 15 years. It is so overcapitalized that with a market cap of $3.2 billion a buyer would need only about $2 billion to acquire after considering the ability to use the equity portfolio as part of the payment!
  • J
    Joe
    Market soaring to new heights yet ANAT can't get a bid.

    The Moody wealth destruction team is always working overtime.
    Bearish
  • J
    Joe
    TP - You are trying to make sensible suggestions to despots who don't care. They have trashed ANAT and NWLI for years. Nothing will change. Ever. People including myself have argued "they should do this or that" for years and years. Nothing ever changes.

    I'm short ANAT and loving every minute. I have a buy stop in place just in case they magically come to their senses, but that is not in their plan (that is, of course, if they have a plan).
    Bearish
  • J
    Joe
    This was in Barron's 13D filings. One could easily substitute ANAT or NWLI for First United:

    Driver has been advocating a sale of First United to a larger financial peer for at least the past nine months, believing that such a move would be the best option for lifting shareholder value, compared with the bank’s “commitment to a standalone path that is unsupported by a viable strategy or credible business plan.”
  • J
    Joe
    Support is broken. Must be yet another quarterly earnings debacle coming.

    Or maybe some other bad news.
    Bearish
  • J
    Joe
    Near 52-week lows with the rest of the market near ALL-TIME highs.

    Probably more selling to come especially if it breaks 111 or 110 final support.
    Bearish
  • P
    Paul
    You are right that not many people care about book value currently, but if companies do their accounting
    conservatively and correctly, book value doesn't simply disappear overnight. This is why I refuse to buy companies with
    enormous amounts of "goodwill" and other "intangible assets". You can checkout what happens to companies who paid
    too much for acquisitions and booked monster amounts of goodwill by looking at GE and Kraft Heinz.

    When interest rates are very low and money is almost free, book value may not be important but eventually this situation
    will change and companies will actually have to have cash to pay their bills. I am thinking of you, Tesla and Uber.

    Did anyone in all of humanity ever think their would ever be a time when the world would have $17,000,000,000,000 of
    sovereign debt in the world with negative yields? We are living in historic times and I am sticking with companies that
    have real book value.
  • I
    InvestingThought
    Interesting - they declare a dividend before they release earnings!! Past practice is earnings a few days before dividend announcements. This looks like a reversal in pattern.
  • P
    Paul
    Joe:

    For the most part I share your sentiments about ANAT and NWLI, but what do you want them to do?
    I agree that it what would be good to buy some stock at these prices but how much could they buy?
    I don't know how the the 2019 earnings will stack up against prior years operating earnings but GAAP
    earnings should be a record and realized gains happen frequently. So how are we expected to analyze
    this? Many of the other more famous and larger companies trade closer to fifteen times earnings and are making
    new highs while ANAT looks to be making record GAAP earnings and is making new lows. I suspect
    that part of the reason that the Moodys don't buy back stock is that the market is irrational and they
    would have to buy it all back. That they will never do.
  • J
    Joe
    The Russell 2000 was up 2% today and this POS was down. This thing will go back to $60 when the next downturn comes. I'm staying short.
    Bearish
  • J
    Joe
    Why hasn't the company announced the dividend yet?
  • J
    JB
    Back to trading at greater than 40% discount to book value!
  • J
    Joe
    If this POS breaks $116 it will probably go on down to test the 52-week low.

    What are the chances? The Moody Wealth Destruction Team is still in place!!