Highway Insurance Share Discussion Threads

[dumpling] 27/2/2007 15:18

BRE down 13.5P. HDU up a fraction. Just market sentiment I hope. I tried to cheer myself up by looking at today's falls as a buying opportunity so I splashed out on a few SVT. All the best everyone.

[nigelwestm] 27/2/2007 15:10

Highway has really taken a knock today. Just falling with the rest of the market, or something more sinister...?

[nigelwestm] 14/2/2007 12:20

Hmmm... ex-CEO returning by June.

[noiseboy] 24/1/2007 09:04

There were some large trades going through yesterday, Looked like an institution. We may get an RNS today

[gorse] 24/1/2007 08:52

I top-sliced 25% of my holding yesterday at >84p yesterday ... mind you I sold some last year at >93p.

[noiseboy] 24/1/2007 08:42

steady as she goes!

[karldinnel] 24/1/2007 08:42

Well I followed barkjon23 and sold half at 81p last week. Mind you, I partly did that so I could get exposure to Metalrax (another high yielding share) and was rewarded with a 10% rise in two days. However, I've still got plenty of exposure to Highway, so looking forward to 90p.

Been in this since 40-odd pence, so the capital gain and the dividends have made this one of my most successful picks in a while.

[leadersoffice] 24/1/2007 08:27

Inch by inch where creeping up to last years high of 90p. Hang on in there.

[barkjon23] 17/1/2007 14:26

Missed that. I imagine it'll be short term negative - reduction in cash/ issuance of shares at a discount.

Hopefully positive on the share price in the medium term. I've lightened my holding at 80 having bought at 67.8

[karldinnel] 17/1/2007 09:40

According to a report from AFX, Highway is in the frame to buy Provident Financial's car insurance arm: Provident Insurance. Any views on what this will mean for HWY's share price?

I suppose any consolidation will be good for the sector, whoever buys it.

[sahara] 09/1/2007 17:24

This one popped up on my stock screener today, however I see from the fundamentals that the revenue is forecast to drop over the next two years, can anyone explain why this is so?

I am looking to buy, but with the dividend covered only 1.2x going forward causes me to hesitate until I find out why.

Thnx

S.

[leadersoffice] 31/12/2006 12:59

Heather Connon looks at how our investment panel fared this year, and what they back for 2007

Sunday December 31, 2006
The Observer




Patrick Edwardson, manager of the Scottish American Investment Trust at Baillie Gifford

Highway Insurance

'Highway is a small motor insurance underwriter [its market cap is £155m]. Better management and improving market conditions for motor insurance should drive earnings higher and it's absurdly cheap on eight times 2007 earnings and with a 7.3 per cent yield.'

[l3gend] 28/12/2006 13:56

I think that once the dividend for this is announced in March with the full year results then the stock should re-rate significantly.

[noiseboy] 28/12/2006 10:22

Looking good for a breakout

[l3gend] 27/12/2006 20:21

As I said above, it is 6x using a 98% combined ratio and 5% investment return. I would use that as a base.

[johnsoho] 27/12/2006 14:46

January 2007 addition of 'Money Observer' carries an article titled 'Shares tipped for big gains in 2007'...Patrick Edwardson of Baillie Gifford tips Royal Bank of Scotland (RBS) and Highway Insurance (HWY). About Highway insurance the statement is made that 'improving conditions in the UK motor insurance market should be the catalyst for a rerating. HWY is trading on seven times 2007 earnings per share and offers a 7.5% yiels. The shares are grossly undervalued'

As always, time will tell, but I hope he's right!!!

[l3gend] 19/12/2006 09:54

Did some more work on this. If you assume a combined ratio of 98% (which is what they are currently making and seems reasonable given they say that they have raised prices) and an investment return net of expenses of 5% on invested assets and tax rate of 35% then this stock looks to be on a P/E of 6x. Seems very cheap. Target is 130p for me. In terms of the dividend.,,,they have tangible NAV of jsut under 30% of premiums which looks fine - they are generating an ROE of 20-30% and are not growing their premiums so they have free cash flow same as earnings. So payout ratio can actually go up quite a bit - would think the DPS should be raised this year, leaving yield very attractive.

[l3gend] 18/12/2006 11:46

Seems a good one to own. (1) UK motor insurance market is nearing the bottom in terms of pricing - NU and RBS both indicated raising rates. This should help profitability and will also benefit disproportionately the lower cost operators, of which HWY is one. (2) There has been consolidation in the market. IAG (International Australia Group) particularly active. HWY LN seems potential take-out in my view. (3) Dividend should be supported. Looks like they got hit on Amaranth and I cant figure out why they are so geared to hedge funds but hedge funds have been doing well recently so investment income should have recovered. Dividend yield at this level, given cyclcially low profitability, makes the stock an interesting one on the long side in my view.

[noiseboy] 28/11/2006 13:46

whats with the drop?

[ursus] 09/11/2006 01:01

i wouldn't mock effortless if i were you. i may hold 500k now, but he's a lot closer to the market than you or me, so i fear his reasons!

[karldinnel] 08/11/2006 21:02

Yes. The director buying is normally a very good signal, and the divi is one of the best in the sector. It seems not making some effort to understand these points makes you a fool!