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Strategies & Market Trends : Value Investing

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To: gizwick who wrote (47028)	3/14/2012 5:11:41 PM
From: Spekulatius	2 Recommendations Read Replies (2) of 78615

re PNX - Book value at $9.67. I noticed that the deferred acquisition cost of ~1.3B$ exceeds the shareholder equity of 1.2B$ or 110% of the equity. I compare this with solid and high rated life insurance companies, where DAC is typically in the order of 50% of their equity, sometimes even less. This indicates aggressive accounting (activating costs) Also, their income statement is riddled with special charges year after year, any idea when they are going to be done with them? I personally would not make a contract with them for a long tail insurance because their AM Best and credit rating is so crappy (BB-), although apparently improving. This is a high beta dogshit company (imo). FWIW, it appears that you are very good at what you do and probably have results that exceeds my returns. I am guessing that you also accept much higher risk than I do. For me, the apparent momentum in stock price is not worth the risk indicator that i see in the balance sheet, which would make me very uncomfortable to average down, should this stock go down for whatever reason. So it's not a stock for me unfortunately.

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