valuing insurers: NWLIA.
Knowing this about any company is possibly good and maybe sufficient: "what...their assets and are they really worth what they claim + whether their liabilities are not understated".
I've not found it necessary though for insurance companies. Book value (the growth of)is the standard metric used by analysts and the companies themselves in evaluating insurance company performance.
On that basis NWLIA is cheap. Because it has almost always sold below book value. As it does now. Which means for the past several years it's almost always been cheap by my reasoning, because it's almost always sold under bv. Could you make money in this stock? Yes, because book value has increased every year and and the stock price has mostly followed it (up) too. Is the stock a great buy now? There've been years when the the p/bk has been .7 or lower; it's now .8. Although I've been in the stock since '02, I made my first small add recently @ $190.
Nobody seemed to be interested in the stock when I was posting on it here in '02. I made several buys then in a taxable and in an ira account. I still have all these shares (because the stock is still undervalued, imo). One discussion point back then was that the stock was iffy because patriarch Moody and his family --the controlling sharesholders ---might not be running the company for the good of all shareholders. Over time, for me, I don't have much of those concerns now, given the growth in bv that the company's produced and my cursory reading of the annual reports.
It's the same regarding Moody-controlled ANAT. I've been in since '01 with dividends reinvested, and I made my first small add in Aug. this year with the stock at $120/sh.
When someone is in a company for several years, over time, one gets to have some comfort, understanding, and knowledge of how the business is run and its issues and problems and strengths.
My opinion is that rather than "running from NWLIA", an investor ought to look closer at it, and maybe pick a point where the stock might make for a small buying opportunity. (.7 p/bk? Now at .8 p/bk?)
I continue to look for and buy and hold several other insurance companies that sell below p/bk. |
