T23Agree. I think, in the long run, the "COR moving average" (if...

T23

Agree. I think, in the long run, the "COR moving average" (if there is such a term!) is trending downward for CIX, reflecting sound fundamentals etc. I agree that over the longer-term CIX is a great investment - indeed, I think when the market picks up in 2 to 3 years time (i.e. PE ratios return to long-term normal levels) CIX would be a target for takeover itself: the nature of the portfolio (good mix of short and long-tail, in sound markets) make the portfolio quite attractive. If you looked at "insurance book value" as being market cap less net investments, the cost of the insurance book is miniscule: and on that basis I think CIX will be a rather nice pick-up for one of the bigger boys once capital markets free themselves up a bit.

That said, in the short-term people are stock picking, not sector buying - particularly on smaller stocks that are not part of the ASX300 or other indexes that are tracked. On a stock-pick basis, the falling returns from investments in H1/09 probably make CIX a good "buy on dips" play, particularly if you believe in the long term potential.

I personally see CIX's market cap value at around $120 million - being $80 million in capital, plus unrealised capital of around $10 million (JVs etc), plus around $30 million being the value of the insurance book (take GWP to be around 300 million in two years time, and at a ratio of 10 to 1 (long-term market value). On that basis CIX's long-term value is around 52 cents - so if you are prepared to find a level and "just buy" (and bottom drawer) there are good long-term gains to be made on this stock.

Looking at the immediate picture, the recent exit of a top 10 shareholder is probably more reflective of the "entire value" picture - the fact that PE bargains are easier to find elsewhere at the moment. I wouldn't be too scared off by this exit - and, over the long-term, think you will find a stable holding by the two top shareholders - Hunter Hall and Australian Unity.

I think CIX really needs to lift its game, though, on things like corporate communications. Not just the written or spoken word, but the unwritten as well. Kirk, for example, has accumulated 98% of his holdings via the company executive bonus programme, with the balance coming from rather puny purchases from time to time. If it was me, I would be stepping up to the plate at these sort of levels and buying; and in doing so signal to the market that I thought there was good value to be had at current prices. Somehow ex-Promina-Kirk (I think his background was a portfolio manager) has a default position of "risk averse"; and this blinds his view to the longer-term responsibilities that he, as a CEO, has to the company through his actions in this market.

Anyway, nuff said. Simple stuff for me. Buy 30/32, sell 40 short term. Long term accumulate 30's with 50 target. Ignore the noise, stick with the fundamentals.

Best regards
Kit