Hey MC, Spuculatius et al...
I agree, financial stocks are much harder for me to value. I think that life insurers are many times kind of book value plus 20% type stocks -- have to look at combined ratio, etc... a little tricky sometimes, see Scottish re etc... and other reinsurers that just imploded but looked dirt cheap. I liked NAHC at 60% of book last summer, I still like NWLIA but in 2005 you could have bought it for 10X EPS and 60% of book as well. SAFT, as I said before looks ok. PLFE, there is a commercial paper conundrum.
AS for Irish banks, I know about as much there as I do on speaking taiwanese -- ie nada zilch zero -- agree that the owner earnings type cash flow there looks less interesting. IMOS has a lot of owner earnings, but again, out of my circle... If I found an ice cream company or an oil company with good margins, under book, I'd be happier there.... TMR? I dunno. I interned for Legg Mason for one week as a college kid. They are awesome. I think the Amazon holding and the web stocks turn off their core investing audience however, and until they move out of the higher PE names I am not sure what will happen to AUM. That said, that is their circle and not mine... so as an investment, the funds I am sure are fantastic. As for the stock, I agree that it is better than the other competitors, less murky and more asset management oriented. The move into HF is good for them as it is higher margin and also can make money if their mutuals underperform or if the markets take a dive. I don't predict such things, I just buy 50 cent dollars, and watch my dollar like a hawk. Do like GOT. No position though. CRC may be okay, but losses need to stop soon. MHK covered calls. That's a housing play sort of and its cheap enough for Ruane and co so its probably cheap enough for me. Not gonna buy AIB, does look cheap. However, I look at cash flow for banks. It may be the "wrong" metric, but its what I use for all stocks, along with net tangible assets.... can you explain in further detail why a Bear Stearns etc... negative cash flow is okay? For any other company I would see that with the high EPS as poor quality earnings.... need to learn more so sharing your thoughts here would be much appreciated given the financials low PE's. Thanks, nick |
