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To: RockyBalboa who wrote (11005)	7/18/1999 3:13:00 PM
From: Q.	Respond to of 18998

is, did UAI get its acquisitions from a related party? I didn't notice that when I was glancing through the filings. Can you direct me to the filing or news release that gives this info? If true, this would be a further red flag. In fact, a huge one, because of the large size of the goodwill. Goodwill (e.g.,"customer lists") is an indication that a co. paid more than book value (or more technically, more than net tangible assets or NTA) for its acquisition. If the goodwill is huge in comparison to the NTA, it means that the co. may have greatly overpaid. And if the people that received the greatly inflated payment from the co. were the same people that control the co., then that means that they enriched themselves personally at the expense of the small stock investors who bought shares in the co. BTW, agreed that if they amortized the customer lists faster than 40 years, the reported earnings would take a huge hit.

To: RockyBalboa who wrote (11005)	7/18/1999 3:16:00 PM
From: Q.	Read Replies (3) \| Respond to of 18998

re. valuation for UAI, you did a valuation based on earnings before depreciation and amortization, which is a sort of cashflow. I tried this and came up with a number different from yours. In the last quarter they had EBDA of $2.0 M. Annualizing that, gives a runrate of $8 M, or $0.33 per share. Peer insurance companies have a multiple of about 23 X cashflow, yahoo.marketguide.com which in the case of UAI would put the value at $7.54. So I came up with a higher valuation than yours, based on cashflow. (Maybe the discrepancy is that you used trailing twelve months and I used an annualized run rate based on the most recent Q?) Of course my valuation based on book was a lot lower. That valuation was less than 3.80. And all these valuations are way below Friday's stock price of 27. One thing that is clear to me, the financial statements for this insurance co. don't look anything like those of its peers. The peers have balance sheets dominated by good assets like bonds, and they have deprectiation/amortization that are very small compared to earnings. Not like this company.