Graham and Doddsville -- Value Investing In The New Era Message Board

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Strategies & Market Trends : Graham and Doddsville -- Value Investing In The New Era

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To: porcupine --''''> who wrote (1319)	2/21/1999 4:26:00 PM
From: porcupine --''''>	Read Replies (1) of 1722

A Strictly Grahamian Investment? In this week's Barron's (2/22/99, p.20), "Sizing Up Small Caps" author Rhonda Brammer gushes over "an intriguing speculation", name of Highlands Insurance (NYSE:HIC). In the large font opening lines, Brammer enthuses that HIC, a troubled p&c insurer that hasn't quite turned the corner, is "a $13 stock -- with a shot at earning $1 this year -- selling at 65% of book." Later in the article, she hedges by attributing to insurance stock analyst Stacy Smith the view that (in Brammer's words) "fully diluted statutory book is over $14 a share." Simple arithmetic suggests that by this reckoning the share price is less than 92% of book. While this still suggests a bargain, especially relative to today's bloated ratios, it is not quite the totally discarded cigar butt that 65% of book would be. Fwiw, Market Guide puts HIC's price-to-book ratio at 49%. (See: biz.yahoo.com )

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