Novae Share Discussion Threads

[18bt] 25/4/2009 08:32

Nice support developed around 350p with signs of a breakout. Trading update due at AGM next week.

[18bt] 12/3/2009 16:36

Nice jump today: has a broker put through an upgrade?

[jancarl1] 11/3/2009 17:22

Good stuff. So Fosh has come to his senses. I must say that I was quite shocked initially. I was happy to have a stake in a sound and growing company that had navigated the storm in an impressive manner. Now is not the time to go "all in". The competition is disintegrating anyway. No need to buy them out, just take their market share and laugh your way to the bank. All IMHO.

[ursus] 11/3/2009 16:01

and it's 30% below ntav, which is absurd, really.

[18bt] 11/3/2009 15:58

So that's the Chaucer talks off then. That should allow management to concentrate on maintaining underwriting disciplines and trying to get the investments correct again.

[18bt] 08/3/2009 07:59

Ageed, these were excellent and massively exceeded market forecasts. I can't see the exceptional investment performance being achieved again: market contrast to Chaucer & Catlin to name a few. Rating environment for their classes looks good and capital position now very strong: can see why they like the thought of Chaucer now. Once that is resolved (either way) and some of the other sector cash calls are out of the way, we should see these drift up IMHO. Suspect that they would have ended stronger had not the Brit Rights Issue rumours not hit.

[jancarl1] 06/3/2009 08:39

Results 2008

Splendid results I must say. Rock solid in the face of the financial storm. All the more obvious becomes the huge (45%) gap between share price 300p and NAV 434p that does not seem to be deserved any more. Huge dividend increase from 7.5 to 14p is another indicator of current strength. Given the weakening competition, I am tempted to see a bright future, if it was not for the Chaucer thing (see above).
All IMHO.

[jancarl1] 11/2/2009 13:30

Chaucer has been hammered from all sides most specifically by investment losses of 67m by October 2008 and Hurricane losses of 55m on top. Another area of concern is syndicate 4000 where they have reported claims related to subprime of 17.7m and a number of unspecified claims on top. Obviously the shareprice has responded quite sharply and the current rights issue is another piece of evidence of the dire conditions.
Not so sure about the overlaps and the merits of motor, marine and property classes in the current environment, more specifically their expectations on rate increases and volume growth in these areas.
Clearly for NVA this would represent a nice opportunity to get their excess capital to work really quickly and capture significant upside should the forecasted rate increases go through. On the other hand, I would much prefer to get the capital to work with NVAs current underwriting team. Eventhough that might be slower, it involves much less risk than taking on a potential restructuring case like Chaucer. All IMHO

[18bt] 05/2/2009 11:12

JC Do you have any views on NVA talks with Chaucer? Seems very opportunistic, but would create agency with £1bn premium and motor bias of Chaucer could have good synergies with NVA's UK Commercial business as well as overlaps in the other areas. Michael Dawson's nuclear business has always been an outlier.

If I were a Chaucer shareholder I might prefer the Fosh management team to the Gilmour one.

[jancarl1] 19/11/2008 07:37

I agree. Moreover, NVA appears to be one of the few players who went through the financial crisis without any writedowns on financial assets. They have bought back expensive bonds and still have loads of excess capital to benefit from the first improvement in rates for at least 3 years. One of the few companies that will increase earnings in 2009 over an already successful 2008.

[18bt] 19/11/2008 07:23

I think we can see some good gains in these shares over the coming months. Reinsurance rates are now forecast to rise strongly in the year end renewals and this will lead to rate rises on insurance rates in 2009. Amlin this morning has confirmed the trend caused by the huge losses of capital in the financial markets. Lloyd's agents could be a very good place to park your money IMHO. DYOR etc.

[jancarl1] 22/9/2008 12:33

Chart looks good though. A lot of open space north once we pass 300p. Will probably take another 3-4 weeks until the worst of the hurricane season is past. I expect new highs of 400+ until march.

[tole] 19/9/2008 09:11

Not much of a mover under new regulations today.

[18bt] 31/7/2008 14:15

I deduct forecast dividend for 2008 (c 7.5p final) to get to my NAV figure. Either way it's cheap.

[jancarl1] 31/7/2008 13:09

NAV per 30 June 2008 was 389.6 with 21.4 EPS in the first half and 33.6 EPS forecast for 2008, NAV will be north of 400p by year end without upgrades to the forecast which based on this strong set of results should certainly be possible (EPS of 45p in 2007; halfyear results 08 top 07 by 24% i.e. 21.4p over 17.2p which computes to 55 EPS for the full year should this trend continue). However, if history is any guide this valuation gap will narrow between November and March after the hurricane season.

[18bt] 31/7/2008 08:00

Interims out today: I had to go to the company web-site as I couldn't find them on Digital Look. At first sight look reasonable and decent dividend. More reaction later.

[slaine777] 30/7/2008 19:47

I sold out a month and a half ago because I could see better value elsewhere. What is so special about nva?

[jancarl1] 06/7/2008 18:10

I would call it the same procedure as every year: Hurricane season is upon us until end October. This year plus extra sector weakness due to weak renewal rates and subprime worries (NVA has no subprime exposure).

Legacy provision issues in my view are worked through. I would expect a sale of the legacy business close to book value in due course.

In my view NVA is grossly undervalued in absolute and relative terms.

[ursus] 26/6/2008 11:58

hmm....
weakness today signifies what? big seller? trouble with the legacy provision?

[jancarl1] 02/4/2008 17:31

Breakout attempt! What is going on?

[jancarl1] 22/3/2008 17:27

BT - Some players have lost some capital due to sub-prime writedowns (most prominently Swiss Re), but that would only make a small dent in the accumulated capital base of the industry (talking about Lloyds' business) after two years without major disasters. The way to go to reduce capacity is not to write business at any price, but to stick to the hurdle rate and return the capital to shareholders instead. Which of course would look ill timed after the huge capital increase in NVAs case, however a potential acquirer would look at it as buying the business for 300million (incl. premium) taking out 100-150 million capital immediately without hurting operations and earning 40 million on the remaining 150-200 left. That would be a nice 25% unlevered IRR. Given that the remaining 150-200 would very likely consist of very little of the acquirers equity after having taken out 100-150 earlier, the ROE appears to be quite interesting. Why this has not happened yet would seem to be a result of the credit crunch as financing even for such a no-brain deal is hard to come by at present.

[18bt] 17/3/2008 08:18

JC- DO you think current credit crunch is going to take capital out of general insurance and lead to a slight hardening of rates: it seems to me that everyone's hurdle rates of return should have gone up in the past few weeks as a result of markets getting riskier and the cheap money that has been going into Bermuda from the US must dry up or, in some cases, be repatriated.

I can't see what is going to drive these higher at the moment except for a hardening market. Their cheap, its now well run, its a take-over target, the legacy business shouldn't be a problem, but they can't deploy their capital to make underwriting profits! Sit and wait I think.

[jancarl1] 14/3/2008 09:04

Results out with good news as expected. NAV 40p (incl. deferred tax), 0.75p dividend. Less than 50% of capacity utilized due to declining premiums somewhat blur the outlook. However, at current share price way too cheap.