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Strategies & Market Trends : Buffettology

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To: Freedom Fighter who wrote (2618)	7/20/2000 3:03:13 PM
From: LauA	Read Replies (1) of 4690

HMN - not sure that I would want to pay more than book. Has a nice niche and a nice combined ratio, but also is totally invested in bonds, 25% of which are BBB and worse. Revenue is stalled. Profitability is tracking other P+C's. I was told by a small P+C last quarter that price competition is declining, but pricing power is not there. Haven't parsed out the annuity business, but it could be sweet. They've been buying back shares. (Most came in at $26/share, with recent purchases at $15 and $100 million to spend.) B/O offer ~$30. Was that serious? Note that they farm out their investment decisions. This Fx and the niche could be attractive features for someone. BV should stabilize when interest rates go flat. It looks like they're able to roll their bonds, so they should be able to bake in these higher rates. Short of a random B/O, don't know why the stock should go up much from here near-term. Lau

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