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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: cfimx who wrote (8149)	9/7/1999 1:51:00 PM
From: Paul Senior	Read Replies (1) \| Respond to of 78817

Hello, Twister! re: insurance stocks. "Now is the time to buy." I've been reviewing some of the insurance stocks which I own with a view to increase my positions. I've got a pretty full complement of insurance stocks - several different varieties - and so I'm reluctant to add even more at this time. My opinion is that the insurance business is not supposed to be exciting (if it's done right), and for investors in insurance stocks, it's tough to hold for gains. But profitable. (Sometimes.) I'd like to mention a few insurance stocks which I've put on my watch list: Allstate (ALL): Just by its mere size. I almost stepped up at higher price, but someone on the thread dissuaded me. (Thank you) Safeco (SAFC): Big, and with a nice mutual fund business. Generally, imo, a bargain when selling below book value (which it is now). For anyone who's wanted to take a position in the company, now might be the time. St. Paul (SPC): up from its lows, so perhaps not as attractive as some others. Pxre (PXT): well below book value. This one's been mentioned a couple of times in Barron's. I think (not sure) in their Roundtable by Archie M. too. Conseco (CNC): I own it. (The four above, I do not.) I mention it again now because it is my only choice for an "exciting" stock people here might want to consider at this time. Very aggressive management. Very "incentivized" with options. Price dropping to yearly low. Rapid increase in sales. P/E is low. 10 of 12 analysts rate it a buy. Risky though, imo: high ROE-- makes me uncomfortable. The insurance stock that I think should be considered by value investors is Ohio Casualty Corp. (OCAS). Given that it's an insurance company(with all the negatives that implies), that it really hasn't grown sales very much, that it's getting beat up in car insurance rates in an important market (New Jersey), that we don't know what affect the internet will have on them--but we know it is affecting all old style insurance companies (esp. in auto which is OCAS' biggest line)-- I've started a small position today in OCAS. Because OCAS is: 1. Selling below stated book value and about at tangible book value. 2. Buying back their stock. 3. Selling near a price not seen since early '97 4. Offering almost a 6% dividend yield. (oops. Just missed that ex-div date -g-) 5. But especially, OCAS has been able to increase its dividend for fifty-two years. That is something. I think this is stock that should be considered now by value investors (those who maintain a diversified portfolio anyway). Not saying it should be bought or bought at current price. Just that it's attractive enough to catch the eye and be given the once over. My opinion only. Regards, Paul Senior