Mercury General Corporation (MCY, Financial) is the largest purchase of Robert Rodriguez during the first quarter. He added 64.67% of his position in Mercury General. It is owned by 4 Gurus.
How Does MCY Catch Our Eyes?
Mercury General Corporation (MCY) is the largest purchase of Robert Rodriguez during the first quarter. He added 64.67% of his position in Mercury General.
Robert Rodriguez is known for his concentrated portfolio. His purchases mean deep research and conviction. Luckily for GuruFocus readers, the price has not gone up much since Robert Rodriguez bought. In case if you don’t know Robert Rodriguez, he is the manager of FPA Capital Fund. During the past 20 years, this fund has gained more than 16.9% average annually.
Regarding to his purchase of MCY, Robert Rodriguez said: “ Mercury General is a leading property and casualty insurer with a large market share in California. Its competitive advantage is its low expense ratios for overhead and underwriting losses. Mercury's combined ratio (an industry standard ratio that includes underwriting expenses, losses and general and administrative expenses) has averaged 8.5 percentage points better than the industry for the last ten years. As a result of its expansion outside the state of California, this endeavor has required a substantial capital investment to reach critical mass. Furthermore, it is rolling out a new back-end accounting system as well as a new front-end internet system. These added costs, as well as potential execution risks, have created, we believe, a buying opportunity. We were able to initiate a position at a price that approximates 12x our estimate for normalized earnings, along with a 3.5% dividend yield. With the likelihood of rising interest rates and increased stock-market volatility, we may have the opportunity to add to our holding on price weakness.”
MCY's Business and Market Valuation
California based Mercury General Corporation, through its subsidiaries, writes private passenger automobile insurance and commercial automobile insurance. It also writes homeowners, mechanical breakdown, commercial and dwelling fire, and commercial property insurance. Mercury General Corp. has a market cap of $3.13 billion, it was traded at around $55.13 with P/E ratio of 14.60 and P/S ratio of 0.95.
Gurus' Positions with MCY
Mercury General Corp. is owned by 4 Gurus.
2 Gurus Increased Positions in MCY:
Robert Rodriguez owns 763,900 shares as of 03/31/2007, an increase of 64.67% of from the previous quarter. This position accounts for 2.97% of the $1.36 billion portfolio of FPA Capital. Richard Aster Jr owns 922,906 shares as of 03/31/2007, an increase of 0.23% of from the previous quarter. This position accounts for 1.32% of the $3.72 billion portfolio of Meridian Fund.
1 Guru Kept Positions in MCY Unchanged:
Chris Davis owns 36,000 shares as of 12/31/2006, which accounts for less than 0.01% of the $86.17 billion portfolio of Davis Selected Advisers.
1 Guru Reduced Positions in MCY:
Bruce Berkowitz owns 75,850 shares as of 12/31/2006, a decrease of -7.1% of from the previous quarter. This position accounts for 0.09% of the $4.22 billion portfolio of Fairholme Capital Managment.
Insiders' Positions with MCY:
No insiders have bought MCY over the past 3 months.
How Does MCY Catch Our Eyes?
Mercury General Corporation (MCY) is the largest purchase of Robert Rodriguez during the first quarter. He added 64.67% of his position in Mercury General.
Robert Rodriguez is known for his concentrated portfolio. His purchases mean deep research and conviction. Luckily for GuruFocus readers, the price has not gone up much since Robert Rodriguez bought. In case if you don’t know Robert Rodriguez, he is the manager of FPA Capital Fund. During the past 20 years, this fund has gained more than 16.9% average annually.
Regarding to his purchase of MCY, Robert Rodriguez said: “ Mercury General is a leading property and casualty insurer with a large market share in California. Its competitive advantage is its low expense ratios for overhead and underwriting losses. Mercury's combined ratio (an industry standard ratio that includes underwriting expenses, losses and general and administrative expenses) has averaged 8.5 percentage points better than the industry for the last ten years. As a result of its expansion outside the state of California, this endeavor has required a substantial capital investment to reach critical mass. Furthermore, it is rolling out a new back-end accounting system as well as a new front-end internet system. These added costs, as well as potential execution risks, have created, we believe, a buying opportunity. We were able to initiate a position at a price that approximates 12x our estimate for normalized earnings, along with a 3.5% dividend yield. With the likelihood of rising interest rates and increased stock-market volatility, we may have the opportunity to add to our holding on price weakness.”
MCY's Business and Market Valuation
California based Mercury General Corporation, through its subsidiaries, writes private passenger automobile insurance and commercial automobile insurance. It also writes homeowners, mechanical breakdown, commercial and dwelling fire, and commercial property insurance. Mercury General Corp. has a market cap of $3.13 billion, it was traded at around $55.13 with P/E ratio of 14.60 and P/S ratio of 0.95.
Gurus' Positions with MCY
Mercury General Corp. is owned by 4 Gurus.
2 Gurus Increased Positions in MCY:
Robert Rodriguez owns 763,900 shares as of 03/31/2007, an increase of 64.67% of from the previous quarter. This position accounts for 2.97% of the $1.36 billion portfolio of FPA Capital. Richard Aster Jr owns 922,906 shares as of 03/31/2007, an increase of 0.23% of from the previous quarter. This position accounts for 1.32% of the $3.72 billion portfolio of Meridian Fund.
1 Guru Kept Positions in MCY Unchanged:
Chris Davis owns 36,000 shares as of 12/31/2006, which accounts for less than 0.01% of the $86.17 billion portfolio of Davis Selected Advisers.
1 Guru Reduced Positions in MCY:
Bruce Berkowitz owns 75,850 shares as of 12/31/2006, a decrease of -7.1% of from the previous quarter. This position accounts for 0.09% of the $4.22 billion portfolio of Fairholme Capital Managment.
Insiders' Positions with MCY:
No insiders have bought MCY over the past 3 months.
