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On the Low - Four Insurance Stocks Held by Numerous Billionaires

September 15, 2013 | About:
Sally Jones

Sally Jones

49 followers
According to Deloitte’s Property & Casualty Industry Outlook for 2013: “…Economic recovery has been erratic over the past two years, but there have been gains in private sector hiring as well as auto sales, creating millions of new insurable exposures for property and casual carriers.” The report advises insurance companies to prepare to adapt to a “new normal,” and expect to ‘take two-steps forward, one-step back’ in a recovering economy.

The GuruFocus Value Screen for finding 52-Week Lows shows the property and casual insurance sector with 10 companies out of 69 on a 52-week low. The low ratio is 0.14. These companies compete with strong regional insurers as well as major insurers like Travelers Companies Inc., Allstate Insurance Company, GEICO, and others, possibly safer bets broadly held by billionaires. GuruFocus research shows that gurus haven’t touched about half of the currently listed 52-week low insurance companies, but here are four companies selected for broad appeal to billionaire investors, as of the second quarter of 2013.



Industry Sector: Insurance – Property & Casualty

First American Financial Corp. (FAF)

The current share price is $21.84, or 20.3 % off the 52-week high of $27.40. The yield is 2.19%.

Up 3% over 12 months, First American Financial Corporation has a market cap of $2.34 billion, and trades with a P/E of 8.70.

Incorporated in 2008 as the holding company of First American Corporation's financial services business, First American Financial Corporation is engaged in the business of providing financial services through title insurance and services segment and a specialty insurance segment.

Guru Action: As of June 30, 2013, there are nine gurus holding FAF and active insiders trading.

The top Guru stakeholder is John Rogers who increased his position by 16.66% in the second quarter of 2013. He bought 1,235,405 shares at an average price of $24.67, for a loss of 11.5%. He currently holds 8,650,370 shares or 8.09% of shares outstanding.

In 10 quarters of holding, Rogers has averaged a gain of 36% on 11,305,264 shares bought at an average price of $16.10 per share. He has also gained 5% on 2,654,894 shares sold at an average price of $20.72 per share.

The big news on FAF is that RS Investment Management increased its position by 532.44%, buying 2,483,345 shares at an average price of $24.67 for a loss of 11.5%.

Track share pricing, revenue and net income:

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Tower Group International Ltd. (TWGP)

The current share price is $13.70, or38.6 % off the 52-week high of $22.30. The yield is 5.15%.

Down 28% over 12 months, Tower Group International Ltd. has a market cap of $786.82 million, and trades with a P/B of 0.66.

Tower Group International Ltd. offers property and casualty insurance products and insurance services and products. The company is divided in three business segments: commercial insurance, personal insurance and insurance services.

Guru Action: As of June 30, 2013, three gurus hold TWGP and there is insider trading.

The top Guru stakeholder is Columbia Wanger with 4,064,070 shares or 7.08% of shares outstanding. In five years of trading history, all quarters show losses. The firm has averaged a loss of 36% on 4,548,070 shares bought at an average price of $21.38 per share. The firm has averaged a loss of 41% on 484,000 shares sold at an average price of $23.40 per share.

After nine losing quarters, Guru Paul Tudor Jones sold out his position as of June 30, 2013, selling 759,243 shares at an average price of $19.18 for a loss of 28.6%.

Track share pricing, revenue and net income:

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Proassurance Corporation (PRA)

The current share price is $46.37, or 16.4 % off the 52-week high of $55.44. The yield is 1.89%.

Up 4% over 12 months, ProAssurance Corporation has a market cap of $2.87 billion, and trades with a P/E of 8.90.

ProAssurance Corporation is an insurance holding company for wholly-owned specialty property and casualty insurance companies that provide professional liability insurance for providers of health care services and legal services. The U.S. company maintains multiple claims and underwriting offices to ensure that it has a local presence in the markets it serves.

Guru Action: As of June 30, 2013, there are four gurus holding PRA and one recent insider trade.

The top Guru stakeholder is Chuck Royce who reduced his position by 46.53% in the second quarter, selling 795,000 shares at an average price of $49.77 for a loss of 6.8%. He currently holds 913,698 shares or 1.48% of shares outstanding.

Royce’s five-year history is mostly double-digit gains in each quarter. He has averaged a gain of 66% on 751,200 shares bought at an average price of $27.92 per share. He has also gained 6% on 3,451,048 shares sold at an average price of $43.82 per share.

Track share pricing, revenue and net income:

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Balwin & Lyons Inc. (BWINB)

The current BWINB share price is $23.56, or 15.1 % off the 52-week high of $27.75. The yield is 4.22%.

Down 1% over 12 months, Baldwin & Lyons Inc. has a market cap of $353.71 million, and trades with a P/E of 9.60.

Baldwin & Lyons Inc. was incorporated in 1930. The company through its subsidiaries is engaged in marketing and underwriting property and casualty insurance and the assumption of property and casualty reinsurance. The company’s insurance subsidiaries serve a variety of specialty markets including fleet transportation, reinsurance assumptions, private passenger automobile insurance, professional liability, and commercial property and business owners liability.

Guru Action: As of June 30, 2013, three gurus hold BWINB and insiders are trading.

The top Guru stakeholder is Prem Watsa who took a loss of 1.9% on his current holding of 969,875 shares. He holds 6.5% of shares outstanding.

Chuck Royce reduced his position by 0.92% in the second quarter, selling 3,801 shares at an average price of $24.02 for a loss of 1.9%.

Royce has averaged a gain of 6% on 39,126 shares bought at an average price of $22.21 per share. He has also averaged a gain of 10% on 591,397 shares sold at an average price of $21.44 per share.

Track share pricing, revenue and net income:

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GuruFocus Real Time Picks reports the stock purchases and sales that Gurus have made within the prior 2 weeks. The report time lag can be as short as 2 days after the date of the transaction. This feature is for Premium Members only.

Check out the GuruFocus special feature 52-week low screener to find the stocks hitting new lows but are still held by top investor Gurus and Insiders.

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About the author:

Sally Jones
Sally Jones writes about Real Time Picks. She says, "I truly enjoy watching the Gurus in realtime and telling their story."

Rating: 2.3/5 (3 votes)

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