undervalued insurance stock, page-16

Hi Tiger23

Hey! Looks like you and I should apply for a job there managing their capital (a buyback on the cards!). Shame its only 1.5% of issued capital (a measley $1 million) but its the thought that counts. Makes me wonder what the other released (regulatory) capital will be used for: another portfolio perhaps? (given the hint about dividends from Kirk, I suspect there is a purchase looming sometime between now and the end of the year: current PE of around 12:1 would indicate purchased GWP in the vicinity of $50 million - wonder who the target is??).

Shame Kirk got his fixed interest blurb A-up (obviously the guy needs to buy a few text books there; or at the very least sack his investment guy for allowing such a silly comment to be released!). MTM profits up (in one parra) and then down (in the next): make up your mind Kirk - if you are long duration in a falling market you should expect profits to be up, not down! (so no excuses for the reduced income, ok. Unless of course you have a credit monster you haven't told us about?).

Still reckon its worth a punt around this 30 level. I'm guessing income around the $6-$7 million mark now (just based on half yearly, claims estimates, reinsurance premiums, and previous operating ratios). At a market cap of around $70 million (currently) that's a healthy return, even before you whack the franking on it.

Watch this one - it could be a goody! (esp. if Kirk can learn a tad more about the concept of duration management!!!).


Regards
Kit