Dale Baker, et. al., re. ACGL: "a smaller property-casualty insurer and reinsurer you've never heard of", (ha ha) according to Business Week Special Report - Summer Investment Guide.
They like the stock.
businessweek.com
"And they're cheap. Arch Capital, which generated revenues of $436 million in the first quarter of 2003, is now trading at 12 times 2003 earnings."
If some reporter or analyst believes 12x for an insurer is cheap, he or she is wrong! It's not the p/e that necessarily makes it cheap, and 12x itself isn't historically cheap either. imo.
Holding my small ACGL position. If ACGL could just get their ROE up. A small incremental improvement in ROE would translate to substantial earnings (because book value is substantial). I assume the climate for raising or holding rates is still good (and as Bus. Wk. (and you) have said, some of these companies like ACGL don't carry baggage, like asbestos claims), so MAYBE ACGL might actually be able to increase earnings next year and following.
Paul Senior
(Also have a small position in MRH, mentioned in the Bus.Wk. article. It was a stock suggested for review by Room222 on Buffettology thread.) |
