Since the last time I wrote about my portfolio, things have been volatile.  Here are my actions since then: New Buys National Western Life Insurance Canadian National Railway New Sells — Hartford Financial Rebalancing Buys: Assurant (brnging it up to a double-weight) Dorel Industries Rebalancing Sells: Allstate (2) Assurant Companhia De Saneamento Basico General Dynamics Crp Genuine Parts Hartford[More...]

I own a number of insurers in my portfolio.  Each of them has hard-to-replicate business models, with strong cultures, and good management teams (excluding HIG, which is merely a speculation at present).  The tickers are listed below.But Assurant is the best in my opinion.  Unlike many companies in the life space, their liabilities are stable.  Unlike many P&C insurers, their distribution model is inexpensive, and the downside is limited.  Unlike many health companies, by focusing on individuals and small groups, and not using “teaser rates,” they have had decades of constant profitability.  Unlike many life companies, if the S&P 500 goes up or down, they have no direct risk.Earnings were in the $5+ range in 2007 and 2008.  They should be in the same range in 2009, and with Assurant, the[More...]

Late on Monday, AeroVironment, Inc. (NASDAQ: AVAV) announced that its fiscal third-quarter profit slipped 24% to $4.541 million, or 21 cents a share, from $5.965 million, or 28 cents a share, in the prior year quarter.[More...]

At RealMoney, I wrote an article in 2005 called, Buyers Beware: Financials are Different.  In addition to many other things I mentioned there, I gave six ways that financials were different: Tangible assets play only a small role in a financial company. What constrains the growth of an industrial company? The fixed assets (plant and equipment) limit the technical amount of product that can be delivered in a year. Demand is the ultimate limiting factor, but this affects financial, industrial and services businesses alike. But with a financial company, sometimes the limits are akin to a service business (”If only we had more trained sales reps”), but more often, capital limits growth. The[More...]

I’ve been mulling over whether I should write about insurance M&A.  Ugh, yes, I should say something.  What pushed me over the edge was a piecein the WSJ on the purchase of Philadelphia Consolidated.  When I first heard about the deal, I blinked, and said, “Foreign acquirer overpays to enter the US.”  Is Philly a good company?  It’s a great company, but it may not be so under foreign ownership.  And, the price was well in excess of what it would have taken to create/attract the talent for a new venture.  Paying 2.7x book is not a winner.But, the have been other missteps as well recently.  Liberty Mutual buys Safeco and Ohio Casualty for 1.8x and 1.6x book.  High prices for the assets obtained, and Liberty Mutual can’t lever that much as a mutual[More...]