Conseco Insurance (CNO) Message Board

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Non-Tech : Conseco Insurance (CNO)

CNO 41.29

+4.3%

Nov 4 3:59 PM EST

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To: Mr. Pink who wrote (3304)	10/3/2000 2:49:35 PM
From: Tunica Albuginea	Read Replies (3) of 4155

From YHOO: " Smith Barney Devine's report is encouraging ". by: ReSwat (33/M/St. Louis) 10/3/00 11:30 am Msg: 76495 of 76524 messages.yahoo.com Devine's comparison of Nationwide at 9.6x 2001 earnings was instructive. Apparently, Nationwide is growing at about 15% per share. CNC will grow much faster than that and deserves a higher multiple. Why? Several reasons: First, Gary Wendt. (See GE Capital) Second, the change in accounting method for CNC Finance from gain-on-sale to portfolio method. The way I understand it, they had to start from scratch building a portfolio of loans at the time they made the switch. That means they had a huge distribution system, but zero portfolio value. On a percentage basis, their portfolio of loans will grow very quickly, as this large finance company dumps many many loans into the portfolio. Third, Nationwide is already an efficient company and has already cut many of their expenses. Their earnings have already stabilized. Gary Wendt hasn't even started cutting expense in the Conseco insurance divisions. When you look at Conseco's cash flow projections (which were conservative, according to A.M. Best), they projected that 2002 cash flows will be 60% higher than 2001 cash flows. Conseco is recovering from some problems and will grow very quickly in the next couple of years as it regains stability. In addition to ignoring all of this, Devine doesn't even mention the 66 million shares sold short. That is a huge factor to consider. No decent analyst would just ignore that fact. He's sticking his head in the sand. by: ReSwat (33/M/St. Louis) 10/3/00 11:30 am Msg: 76495 of 76524

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