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Allstate’s in Good Hands – Billionaires Buy

November 30, 2013 | About:
Sally Jones

Sally Jones

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Billionaire investors were actively trading The Allstate Corporation (ALL) in the third quarter. Three new buys were made by Caxton Associates for 50,000 shares, George Soros for 41,500 and Ray Dalio for 11,346 shares, all buying at around $50.29 per share, for an average gain of 7.9%. Ten gurus reduced their positions and six added in the same quarter. The insiders at Allstate have been actively selling since July, running parallel with a 57.1% drop in the company’s net income reported for the third quarter of 2013.

Allstate reported financial results for the third quarter of 2013 with consolidated revenues of $8.4 billion, up 4.1% over third quarter of last year at $8.1 billion. In the third quarter, Allstate’s net income was $310 million, down from $723 million in the same quarter of 2012. Earnings of $0.66 per diluted common share were reported for the third quarter of 2013, compared to$1.48 in the same quarter of last year. Operating income was $713 million for the reporting quarter, down from $717 million in the third quarter a year ago. Third quarter earnings of $1.53 per diluted common share were up from last year’s same quarter earnings of $1.46 per diluted common share. In the reporting quarter, Allstate’s total property-liability net written premium increased 5.3% over the third quarter of 2012.

Thomas J. Wilson, chairman, president and CEO of The Allstate Corporation, commented on his company’s third quarter in a company press release: “Operating income of $713 million was strong, with the underlying combined ratio better than the goal established for the full year, and progress was made on all 2013 operating priorities.”

Here’s a company update and more highlights from third quarter trading by billionaire investors.

The Allstate Corporation (ALL)

Up 34% over 12 months, The Allstate Corporation has a market cap of $24.68 billion. The current share price is around $54.27. Shares trade at a P/E of 14.20. The dividend yield is 1.84%.

Founded in 1993, The Allstate Corporation is the largest publicly held personal lines property and casualty insurer in America. According to the Fortune 500 list for 2012, Allstate ranked 93rd and had $125.6 billion in total assets. The company employs around 70,000 people.

The Allstate Corporation was created to serve as the holding company for Allstate Insurance Company. The company's business is conducted through Allstate Insurance Company, Allstate Life Insurance Company and their affiliates. Allstate is engaged in the personal property and casualty insurance business and the life insurance, retirement and investment products business. The company conducts business in the U.S. and Canada.

Here’s the GuruFocus analysis of ALL, showing four warning signs.

Tracking historical share price, revenue and net income:





Third Quarter Trading Highlights

Guru Action: As of Sept. 30, 2013, Jim Simons increased his position by 401.65%, buying 1,145,900 shares at an average price of $50.29 per share, for a gain of 7.9%.

His current shares are 1,431,200 or 0.31% of shares outstanding.

Across a five-year history, Simons sold out ALL four times. He has gained 20% on 2,286,000 shares bought at an average price of $45.11 per share. Selling, he gained 27% on 854,800 shares sold at an average price of $42.61 per share.

Check out this trading history of pure gains:



Guru Action: In the third quarter, James Barrow increased his position by 6.21%, buying 65,400 shares at an average price of $50.29, gaining 7.9%.

His current shares are 1,117,833 or 0.24% of shares outstanding.

Across a five-year history, Barrows has gained 84% on 1,167,681shares bought at an average price of $29.44 per share. Selling, he gained 34% on 9,820,177 shares sold at an average price of $40.38 per share.

Guru Action: Arnold Schneider reduced his position by 25.98%, as of Sept. 30, 2013. Schneider sold 113,802 shares at an average price of $50.29 per share for a 7.9% gain.

This trade will impact his portfolio by 0.52%. Schneider currently owns 324,252 shares after the trade.

Overall, Schneider has averaged a gain of 123% on 1,141,109 shares bought at an average price of $24.30 per share. Selling, he gained 57% on 816,857 shares sold at an average price of $34.63 per share.

Here’s a look at more guru trading and insider selling in 2013.

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.

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