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"For good reason, there are hundreds of investment managers who are devout Warren Buffett-style value investors," observes Ian Wyatt.
The editor of The 100K Portfolio explains, "From 1965 to 2010, under Buffett's leadership, Berkshire Hathaway (BRK.A or BRK.B) has seen it's per share book value increase at an annual rate of 20.2 percent.
"Since Warren Buffett is now 80 years young, and his partner Charlie Munger is 87, the future leadership of Berkshire is certainly a concern.
Ten weeks into the year and never a dull moment. Pondering the remaining 42 weeks and beyond, where will value be found? We know that "my pal Warren" is on the prowl waist high in Berkshire Hathaway cash to invest, and he is on record as chomping on the bit to do so. Just this morning it was reported that Buffett had closed a $9 billion deal to buy Lubrizol Corp. (LZ), the Wickliffe, Ohio-based maker of engine lubricants. Continue reading Chasing Value: Insured Profits or a Mountain of Risk?
There is a very small (micro-cap) insurance company in Florida called Homeowners Choice, Inc. (HCII) that I included among my stock picks for 2011. My suggestion was made with some reservations, not because of it's growth potential, but because I was concerned that the write-up itself might impact the stock.Continue reading Chasing Value: Homeowners Choice Earnings, Another Great Quarter
This post is one in a series in which more than 60 newsletter advisors share their Top Stock Picks for 2011. This special report is courtesy of TheStockAdvisors.com.
"A stock that should do well in 2011 is Ameriprise Financial (AMP); the company offers financial planning, asset management, and insurance products," says dividend reinvestment specialist Chuck Carlson.
The editor of The DRIP Investor explains, "The company's product focus on meeting the retirement needs of 'mass affluent individuals.'
This post is one in a series in which more than 60 newsletter advisors share their Top Stock Picks for 2011. This special report is courtesy of TheStockAdvisors.com.
"Aflac (AFL) represents a top year-ahead pick based on its solid operating momentum and modest valuation," says Richard Moroney.
The editor of Dow Theory Forecasts explains, "In our proprietary ranking system (known as Quadrix), the stock earns an Overall score of 99.
This post is one in a series in which more than 60 newsletter advisors share their Top Stock Picks for 2011. This special report is courtesy of TheStockAdvisors.com.
"Insurers benefit when things go wrong; that explains our latest top pick, Catlin Group Ltd. (CNGRY)," says global stock specialist Vivian Lewis.
The editor of Global Investing explains, "Incorporated and regulated in Bermuda, and listed primarily in London, Catlin Group is the largest syndicator at Lloyd's of London, the reinsurance business. It's also a favorite holding of institutional investors.
This post is one in a series in which more than 60 newsletter advisors share their Top Stock Picks for 2011. This special report is courtesy of TheStockAdvisors.com.
"Financials appear to offer among the best opportunities for 2011," says ETF specialist Jim Farrish.
The editor of Sector Exchange explains, "Indeed, my favorite ETF idea for the coming year would be the First Trust Financials AlphaDEX ETF (FXO), a well diversified way to play the sector overall.
Continue reading Top Picks 2011: First Trust Financials AlphaDEX (FXO)
"Spun-off from American Express in 2005, Ameriprise Financial (AMP) is in the midst of a transformation from an insurer to a full-blown money management firm," notes long-term value investor John Buckingham.
The editor of The Prudent Speculator explains, "Eyeing an opportunity to gather assets on the cheap, the company spent close to $2 billion during the financial crisis.
"The company purchased Columbia Asset Management, J&W Seligman and H&R Block Financial. In total, it acquired $224 billion in new assets, bringing total assets under management to over $445 billion.
Continue reading Ameriprise (AMP): A 'Prudent' Pick in Financials
Catastrophe bond capacity is maturing, and not much of it is coming back. In the first quarter, $1.8 billion in cat bond risk capital matured, and only $508 million returned in the form of new issuances, according to Thomson Reuters. This quarter, $2.77 billion is maturing, and the absence of first-time issuers makes it unlikely that the market will replace it all. More than a billion of it was from State Farm's Merna Re transaction. The successor to it has already been issued, cleverly named Merna Re II, at only a fraction of the previous bond.
When the government stepped in to begin bailing out financial institutions, it impeded the growth prospects of the best run companies and disrupted the smooth operation of markets. John Finnegan, CEO of Chubb (CB), called the intervention "troubling," as it essentially took weakened companies out of the acquisition market.Continue reading Chubb CEO Says Bailouts Cost Insurers Opportunity
Merna Re, the largest catastrophe bond of all time, is set to mature in June, and State Farm is already putting together its replacement, the creatively named Merna Re II. The successor, planned for issuance in April, is said to be for $400 million in risk capital, though investor demand could push it as high as $700 million. This still pales in comparison to the $1.2 billion that the original brought in the door.
If State Farm is able to stimulate demand for Merna Re II, which would protect the company from non-California earthquake risk in the U.S., it will be third cat bond to come to market in 2010, which is expected to be a strong year for this form of risk transfer. The cat bond market fell silent after the near-collapse of American International Group (AIG) in September 2008 but was still the third busiest in terms of capital issued in the history of the cat bond market. Heading into 2009, prospects for the cat bond space seemed uncertain, but a robust fourth quarter eventually resulted in a year-over-year increase, driven mostly by repeat issuers.
When 2008 ended on a sour note, the reinsurance industry looked to 2009 with trepidation. Since the financial crisis struck late in the third quarter of 2008, it was clear at the time that the effects would spill over into the following year, though signs of stability in the reinsurance market left reason for hope. Now, we're looking back on the year that was, for 2009, rather than the one to come, and Munich Re (0KFE) is putting it in the "win" column. The reinsurer logged a bottom-line result of €2.56 billion, up profoundly from €1.58 billion the year before. Munich Re has already announced that it's raising its dividend to €5.75 per share.It's not an unusual problem at this time of year. We're a few months from June 1, the official start of hurricane season, at least as far as the insurance industry is concerned. Through April and May, the Florida legislature will rush to nail down details pertaining to Citizens Property Insurance Corporation, the state entity that provides insurance to some homeowners (usually when risk is too high for private insurers to accept), and the Florida Hurricane Catastrophe Fund, which provides some reinsurance protection to carriers writing property-catastrophe risk in Florida. Continue reading Annual Ritual: Speculating on Florida Insurance Market's Strength
Insurance company upgrades outpaced downgrades by 50% last year. In a report by insurance rating agency A.M. Best, Upgrades, Downgrades Moved at a Similar Pace in 2009, 36 commercial property/casualty insurers were upgraded, compared to 24 that saw their ratings head in the opposite direction. Continue reading Insurance Company Upgrades Beat Downgrades by 50% in 2009
This post is part of a special report, Top Picks for 2010, the 27th annual survey in which TheStockAdvisors.com asks the nation's leading advisors for their single favorite stock for the new year. See all 80 stocks listed here.
"Universal Insurance Holdings (UVE) is my stock pick for 2010," says Neil Macneale, editor of the In his 2-for-1 advisory.
Incidentally, Neil's top stock pick in last year's report -- Teck Resources -- soared 650%. Here's his new favorite for the coming year.
Continue reading Top Picks for 2010: Universal Insurance (UVE)
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