Re GTS - yes it is a stock that should show up in screeners based on low PE and low P/B. I have not heard about the 20M$ in high risk Puerto rico bonds, but it would not surprise me. I think they mention about 50M$ in Puerto Rico bonds in their Investor Day presentation, but those seem to be higher grade. In any case, a 20M$ hit would not bother me, as it would only impact a quarterly earnings, but is small enough, that it does not impact their capital base.
sec.gov
The headwinds from the Puerto Rican economy have been around for a while, since they almost had 10 years of recession.
What i like about them (besides the low valuation) is that they have dominating market shares and a property as well as a life insurance operation. The owners want to sell out apparently and exchanged B for A shares, which means a simpler ownership structure and a possibility of buyout some time down the road. They retired a good amount of shares in conjunction with a secondary (from the owners), which i think was accreditive to shareholder value (since done quite a bit below book). They could also try to monetize the smaller life and/or property insurance operation and I think the health insurance co would be a good fit with WLP, because both are operating under the "Blue Cross" license without overlap.
Lot's of ways this can work out well, unless they become permanently impaired. |
