Lancashire Share Discussion Threads

[salpara111] 05/11/2014 08:59

A little surprised by the initial share price reaction as this year should mark a final inflexion point now that the fed has finally announced that it is to start unwinding quantitative easing.
What I find most impressive is that in a year they describe as the worst since they were founded they should still make circa $100M profits and yield over 10%.....most listed companies would kill for that sort of performance in a great year!
To me the NAV is irrelevant, cash flow, profits and divi are what determine the share price and on current metrics there is no reason why the share price cannot rise dramatically from the current level, having said that it is clear that until they can show that the underwriting environment has turned the corner the share price will struggle to rise.
It will be interesting to see if the share price does rise to account for the substantial upcoming divi...if it does not then the share price will drop back to the 500s which I do feel would put them in danger of being taken out.

[woodcutter] 05/11/2014 08:21

decent results and good divi declaration, will hold for now. We need to be mindful that the book value is a function of the exchange rate which has strengthened appreciably in the last year or so.

woody

[jonwig] 05/11/2014 07:34

The fully converted book value is $7.74 per share, or 465p, so the share price stands at a 40% premium.

Whilst the company's performance should warrant a premium, that looks fully-valued to me ... 700p, 800p is away with the fairies.

[adorling] 05/11/2014 07:20

With the current price at 651p we should the share price move up to 725p to reflect the Special Dividend payment of 75p a share for holders on ex-dividend date on 28th November. If is does not get to 725p then I will be out as on 19th December the dividend will be paid and the price will drop 75p.

[nw99] 05/11/2014 07:10

Nice set of results

[adorling] 27/10/2014 11:02

Looks like we are on our way back to 700p then if we break through 800p is within reach again - quite likely as we build towards the "Special Dividend" period.

[jonwig] 11/9/2014 06:41

keith - more on your buyback query.

Three sets recently, totalling 0.29m shares, or about 0.14% of share capital immediately before they started.

(Last buyback program was in Oct 2010.)

Number of treasury shares now 2.2m. Conversion of warrants so far this year has resulted in issue of more than 3.9m shares, so there is net dilution.

Number of outstanding warrants appears to be some 20m, exercisable at an average of about $5 each. Mostly within two years of now. If I've read the terms right, ther rate of exercise should speed up.

(It's all pretty complicated - see AR 2013, page 165.)

[keith95] 10/9/2014 16:28

jonwig - I'm with you thanks. Not seen this before, probably quite common, but the banks just dilute shares so this is much better. At least there is someone buying other than me!

[jonwig] 10/9/2014 13:26

keith - haven't checked, but it only started recently after a long break.

The main point is, I think, that the resulting treasury shares are used to satisfy warrant conversions (and employee schemes) so the shares issued in these don't result in dilution for us lot.

[keith95] 10/9/2014 12:19

...anyone know how many shares are being bought back?

[keith95] 05/9/2014 09:13

Neil Woodford looks for relatively boring stocks, with a 4%+ yield and forward/backward dividend cover of 1.5 or more .. from the Buffet school of investing IMO.

Have built up a small stake from 6.08p ... looking forward to a special dividend.

[woodcutter] 01/9/2014 16:44

with insurance prices softening and increased competition coupled with significant improvements in cash balances on balance sheets for non life insurers i wouldn't be surprised to see a few take overs in this sector in the near future.

aimho. woody

[speedsgh] 29/8/2014 11:16

Going by his name, he probably knows a lot more about public schools than Woodford. In fact it appears he attended good old Harrow. Jolly good show + all that ;o)

[woodcutter] 29/8/2014 10:32

some interesting short positions on LRE, percentages of total shares

JP Morgan 0.53% from 22/7/14
Odey asset mgmt 2.4% increase 0.08% on 8/8/14

total shares 190.2m

2.93% equates to roughly 5.6m shares
average daily shares traded over last year around 450K

any decent upward trend might see those shorts closing which would have a decent impact on the share price

aimho

woody

what does Crispin Odey know that Neil Woodford doesn't?

[woodcutter] 26/8/2014 12:10

From a TA perrspective there was a clear buy signal at the recent drop below 600p, +ve divergence. It looks to be forming a possible reversal signal at the downtrend resistance. Would like to see it break through 660p and generate new uptrend.

At the moment pretty much in line with sector performance. And the sector is in the doldrums so i figure a good time to add, at some point it will turn.



woody

[topvest] 23/8/2014 18:45

This is a great company , but the sector is awash with capital at the moment. This will no doubt do very well when the insurance cycle turns and in the meantime it should make reasonable profits . More than happy to hold.

[jonwig] 23/8/2014 11:49

It's likely the share price will be range-bound for some while...

Warrants are being exercised, thus diluting the equity. On the other hand, there have been repurchases in the past, transferred to treasury, and these shares are being re-issued to satisfy the conversion.

I seem to remember that share buybacks could resume at around 1.2 x NAV, which would help support the share price above 550p.

Anyway, a substantial dividend is likely early next year, if you don't mind the xd effect.

[keith95] 23/8/2014 10:10

Yes ... topped up thursday ..

[woodcutter] 22/8/2014 21:37

Woodford keeps buying..........so do i.

woody

[keith95] 20/8/2014 09:09

... bought in today ... we will see GLA.

[jonwig] 18/8/2014 08:12

The key statement is (H1 results):

"If there are no major events, and no change in the market, it remains likely that we will return the majority, if not all, of our earnings to our shareholders later in the year."

So any suggestion that the yield will be around 9% is based on broker estimates of earnings and therefore dividends.

These seem to be 64p and 55p respectively. You can get the 64p by simply doubling the H1 eps of $0.54.

[masurenguy] 18/8/2014 08:03

Prospective yield is actually 9p or around 1.5% following the 40% cut in the interim dividend. Last years dividend of 15p was bolstered by two special dividend payouts of a further 45p - making a total of 60p or circa 9.7% yield on todays price - but one cannot assume any repetition of further special dividends this year.

[gargoyle2] 18/8/2014 07:48

Is this really on a prospective yield of around 9%? Apologies, not much research done other than a look at Stocko - pedia.