FWIW, moving to a full position with CTZ (Chicago Title), a stock that works for me on many levels:
Value: pe under 8, no debt, maybe 4x cash flow
Dividend: 3.7%
Spin-off: from Allegeny
Margin of safety: 5% stock repurchase recently announced
Business power: Chicago Title writes one of every five title insurance policies in the US. They are consolidating (that's IMO) by buying small shops to expand their presence/capabilities.
Negatives: not a lot of history available (to me); stock may continue to fall as Allegany shareholders dump; p/bv is 1.75. It may be widely assumed, but not proven (to me), that if housing market declines or interest rates rise, CTZ will suffer, and its stock also.
Other info: FAF - a competitor, was Marty Whitman's #1 holding in 1/98. Joe Cornell, president of Spin-Off Advisors, said (3/4/99) of CTZ, "I keep scratching my head. This is a no-brainer".
(aside: Paul Senior says though -g-, there ain't no no-brainer stocks, and if there are, then them are the most difficult kind to make money with. -gg-) |
