Castelnau Share Discussion Threads

[boros10] 24/3/2011 09:02

Collins Stewart said Bez might lose 6% of NTAV on Japan exposure. With the share price below forecast year end NTAV, an earnings yield in the high teens and 25 years of unbroken underwriting profits make Bez the best bet. I am also looking at Chu but like you worry about their Japanese exposure and the possibility of large losses putting off potential bidders.

[boadicea] 24/3/2011 00:03

Having just collected on the BRE takeover and looking around other non-life insurers I find them difficult to value at the present time due to the unquantified (unquantifiable?) nature of recent claims potential.
Decided on balance to pass on CGL but feel that CHU may have possibilities although it already has some t/o speculation in the share price

[joesoap3] 23/3/2011 09:00

At present, the company is undervalued and has one of the best yields on the market that is quite well covered. But with the impending costs of the two earthquakes alone and assuming there are no more disasters this year, how safe is the dividend?

[tarvold] 21/3/2011 22:43

Insurance companies are always doubly hit when the markets fall on specific disasters, not only directly through insurance costs but also by their investment portfolios that fall with the rest of the market.
A rebound of general markets will always benefit an insurance company even if the underlying disaster cost is still there.

[hosede] 21/3/2011 14:53

Add in the divi and it's only 10p short of where it was before Japan.

[joesoap3] 21/3/2011 09:28

I fully agree with what has been said above but the share price is risen 10% since its low last week. Ok FTSE/FTSE250 is rising and maybe the fall was overdone, but given the potential costs involved in Japan, what is a fair price at present?

I think most people agree that CLG was way undervalued and I believe that analysts were forecasting a price of around £7 per share. We have heard talk that it is or was so undervalued it may attract a bid, but recent events must have changed all that.

[fxdealer3] 18/3/2011 14:40

only positive is i think it will turn market but alot of damage in 10 weeks and possibly more to come this year

There are too many unkowns in sector at minute ... the too many risks to the downside .

Maybe when exposure known and valuations drop in a high risk sector .

[effortless cool] 18/3/2011 14:30

And the hurricane season to come, and loads of replacement reinsurance to buy, and Solvency II to pay for.

Critical question - will Japan turn the market?

[fxdealer3] 18/3/2011 14:20

NTAV at 31/12/10 per account is approx £4.26 - Div 18p paid today =£4.07 =$2.3b

NZ net of reinsurance loss is $125m

Japan 6 times loss but net loss depending on reinsurance say $750m


Profit assuming last year $35m per month =($70m )

As at today NTAV = $1495m/1.6 (FX ) /360m shares = £2.60 NTAV per share today .

Adjust figures and you still have marginal capital raising position .

FX

[effortless cool] 18/3/2011 14:08

Thanks for referencing. I believe IC are being misleading - I don't believe the Numis NTA will reflect the Japan quake losses.

[iomhere] 18/3/2011 13:58

edited for 2010. The Numis estimate is in today's IC (OK not to everyone's taste) but your criticism was based on an assumption.

[effortless cool] 18/3/2011 13:54

Considering CGL announced 2010 pre-tax profits of $406m on 10 February, Cazonove's estimate isn't a terribly good one.

Also, Numis' NTA figure will not include the Japan quake (or the New Zealand one, or the Australian floods, if it's as up to date as your other figures).

All in all, one of the worst posts ever.

[iomhere] 18/3/2011 13:38

To 31 Dec. Gross premiums($bn) Pre-tax ($m) Earnings p/sh (¢) div (p)
2006 1.61 275 138 20.0
2007 3.36 543 160 21.9
2008 3.44 -13 -16 23.2
2009 3.72 603 152 25.0
2010 3.14 406 98 26.5

Numis' NTA estimate for 2011, 435p

[fxdealer3] 18/3/2011 12:49

Results will provide information that i need to evaluate the company ...throwing a dice a minute .

Markets are fickle creatures and my bet is over 12 months refecting NTAV which is unkown yet

Alot better companies in sector with better track record that i like .

1 every 3 years cgl makes loss .

Good luck with this high risk company because this share price is unwarranted and overvalued imo .

Time will tell .

Fx

[effortless cool] 18/3/2011 12:47

Maybe, but personally I don't hold any insurance shares at the moment and am more likely to be going short than long this year.

[ursus] 18/3/2011 12:36

Coolie - I guess lower. remember kobe had an insured loss of 3.5bn for an economic loss of as much as 100bn. no doubt the ratio of insd to econ loss will be much greater this time bec of wider earthquake cover since kobe, but much will remain with jap insurers/govt. and i think the cgl price as well as that for other ilv's is telling us that fx dealer is barking up the wrong tree.

[fxdealer3] 18/3/2011 12:09

Time will tell ...as i said interesting ..6 times the insured loss is my basis depending on reinsurance cover being similar to NZ.

[effortless cool] 18/3/2011 12:06

fxdealer,

Your Japan loss looks too high - see my post 216. Whilst the gross loss might scale up vaguely proportionately with New Zealand, the net loss will not. I'd guess ~$300-$400m net.

[fxdealer3] 18/3/2011 11:56

ursus ,
My calcs based on March 10th RNS are $125m loss for NZ after reinsurance cover .

and $750m loss for japan after reinurance cover ( £36b insurance loss compared to £6b for NZ ) .

$875m loss for first 10 weeks plus about $60m profit from other business .Net loss $810m for period .

Hope that helps .First 6 month accounts and rns from CGL re Japan will be interesting .

FX

[ursus] 18/3/2011 11:48

what do you say the ntav is, fxdealer?

[tarvold] 18/3/2011 11:29

I've got my dividend now, TDW, higher than I thought it was.
Must have recorded the wrong price:)

[fxdealer3] 18/3/2011 11:00

I will donate a £1k to a nominated charity if share price is not correlated to NTAV after 2 major disasters over next 12 unless takeover attempt .

CGL will make huge loss this year and NTAV is only method of valuing it and for industry .It is a high risk company .

Whether more funds have to be raised is 50/50 depending on reinsurance cover used for both NZ and Japan .In addition to possible disasters for next 9 months of this year .

Good hunting

FX

[tarvold] 18/3/2011 09:58

Not yet but it is due today.

[thelongandtheshortandthetall] 18/3/2011 09:33

anyone had there dividend paid to them?
thanks in advance.

[ursus] 18/3/2011 07:20

what are yr ideas on the hit to ntav, fxdealer?