Lancashire Share Discussion Threads

[jonwig] 24/11/2014 07:45

Thanks - interesting! No "new" reasons though, of course.

[plasybryn] 23/11/2014 19:05

hxxp://www.tigt.co.uk/secure/documents/monthly/TIGT%20Oct2014.pdf
Note the reference to this conservatively run Investment Trust buying Lancashire Holdings.

[keith95] 22/11/2014 20:41

... not much chance of interest rates lifting in US/UK/EU/Japan and now China ...

Race to the bottom on currency over the short term.

[hooley] 21/11/2014 20:49

QE has meant u/w overcapacity, but maybe it will now reverse. Watch out for interest rates lifting, a forerunner of tightening capacity. If not, then it's more of the same. Either way, an annual return of over 10% is adequate compensation for share price volatility.

[ursus] 21/11/2014 16:45

Sensible stuff, Hooley, but we have a wait for the cycle to turn, of course. And it may not turn before some market changing catastrophes or upturn in attritional losses that will reduce the industry overcapacity (and no doubt LRE's nav and share price too). Another nagging doubt I retain (as a pretty long term holder) is just why Brindle went. Not had any real explanation myself for that from market insiders. I suppose it was quite some time ago now, and nothing awkward has since emerged....
I guess they overpaid for Cathedral, with hindsight.

[hooley] 21/11/2014 16:30

As long-term holders have had notional capital losses in the past 2/3yrs, then the large and regular special divs have compensated. Until the u/w cycle turns upwards, the share price can be expected to languish. The double digit yield is adequate compensation. 575p per share has gone back to holders in the last 5 years, more then the 300p drop in the share price since the peak.

[ursus] 21/11/2014 13:18

Jonwig - that may help to explain why Odey have increased their short approaching other xd dates...

[jonwig] 21/11/2014 12:57

Fruit - since the dividend is essentially a shedding of surplus capital (ie. they don't want to deploy it in writing new lines at unprofitable rates), it's unlikely the ex-div fall will be recovered quickly.

Some who receive the dividend will be liable to higher rate tax, and may in fact be selling ahead of the xd date. Of course, that's only if their CGT situation isn't compromised.

[fruitninja84] 21/11/2014 11:51

Looks like no one wants the dividend ,

[farmsted] 21/11/2014 10:47

I think the title of this board needs changing as the share price keeps sliding

[jonwig] 18/11/2014 14:27

Have it, thanks, and understand.

The normal underwriting cycle is aggravated by yield compression (so QE, ultimately), hence cat bonds, for example, are being quoted at ridiculously low rates - a few could get seriously hurt. LRE have a good capital buffer, and have resisted commitment.

I found this a bit scary:

[speedsgh] 18/11/2014 14:08

jonwig - replied to you on email. rgds.

[hooley] 13/11/2014 16:42

It's the cycle stupid. Coy returns surplus capital via special dividends. Unwilling to chase insufficiently profitable business. If cycle doesn't turn, as it will, more specials to come. Take the long-view and enjoy the double-digit yield meanwhile.

[jonwig] 13/11/2014 15:38

Thanks! There they are - much obliged.

I'll come back tomorrow with some thoughts.

[jonwig] 13/11/2014 15:33

Sorry, nothing there - did you remove the _ symbols and re-interpret? (There are bots which trawl for the markers.

[speedsgh] 13/11/2014 15:28

jonwig - done. you can now take down your address.

[jonwig] 13/11/2014 15:16

speedsgh - I'd very much appreciate a look at the notes, particularly to see the main factors behind their views -



Thanks!

[speedsgh] 13/11/2014 14:13

Woodcutter - re current chart trend + indicators...

Despite some recent respite afaics the share price remains well within the current downtrend channel which commenced Q1 2013. However I'm no great chartist. Assuming the downtrend continues, where do you see next major support on the long term chart? TIA

[speedsgh] 13/11/2014 14:09

Afaiaa Numis + JPM Cazenove are the current house brokers -

Numis still have a price target of 840p but I think that can safely be ignored seeing as they are a house broker.

I have copies of the following recent notes. Flash up an email address if you would like a copy.
Numis - 840p
Citi - 701p
Peel Hunt - 583p
Cannacord - 545p

[masurenguy] 13/11/2014 08:31

If ever you wanted a good example to demonstrate that many "professional" brokers have no more knowledge, insight or expertise than "gifted amateur" PI investors then this is it. Price targets vary from 585p to 724p - a differential of almost 25% - from brokers working on the same data !

No position (yet) !

[woodcutter] 12/11/2014 22:08

I follow broker forecasts too but i'm beginning have little or no faith in them wtfdtk one says £5.45 and another says £7.24.......... and when?

What do Merrill Lynch the house broker say?

One wonders if they've really got any idea, i guess at some point it will be either of those prices and maybe a whole lot in between.

follow the chart trend and the indicators imv.

woody

[speedsgh] 12/11/2014 21:48

Lancashire Holdings Limited Price Target Cut to GBX 545 (LRE)

Stock Name: LRE
Company Name: LANCASHIRE HOLDINGS LIMITED COM SHS USD0.50
Research House: Canaccord Genuity
Price Call: HOLD
Target Price: 545.00

Research analysts at Canaccord Genuity dropped their price objective on shares of Lancashire Holdings Limited (LON:LRE) from GBX 635 ($10.08) to GBX 545 ($8.65) in a report released on Tuesday. The firm currently has a “hold” rating on the stock.

Analysts at Barclays reiterated an “underweight” rating on shares of Lancashire Holdings Limited in a research note on Friday [7 Nov].

Separately, analysts at Citigroup Inc. cut their price target on shares of Lancashire Holdings Limited from GBX 852 ($13.53) to GBX 701 ($11.13) in a research note on Thursday, November 6th. They now have a “buy” rating on the stock.

Finally, analysts at Deutsche Bank reiterated a “buy” rating on shares of Lancashire Holdings Limited in a research note on Thursday, November 6th. They now have a GBX 724 ($11.50) price target on the stock.

Two investment analysts have rated the stock with a sell rating, five have given a hold rating and nine have given a buy rating to the stock.

[woodcutter] 10/11/2014 20:27

free stock charts from uk.advfn.com

The down trend line has now been clearly broken.

The +ve divergence and reversal signal back in august is still trending on three indicators ROC, RSI and MACD. The recent -ve divergence resulted in a share price drop but this looks to be bottoming an today there's a possible reversal back up off the trend line.

A break of the trend line on the indicators would be a significant sign of weakness. Continue to hold until trend is broken.

It's also out of sync with the index, most likely driven by the strong £ and currency headwinds. Could be a good time to continue buying as at some point the $ will strengthen.

aimho..............woody

[salpara111] 05/11/2014 09:21

While I do not disagree that NAV is important. It is also important to realise that net asset value and share price are not the same thing.
Most companies trade at many multiples of their NAV.
The critical questions that determine the share price are the usual...cash flow, profits and a covered divi.
Ironically, declaring a special divi of over 10% is saying that they don't see the opportunity to greatly increase their underwriting book in the next year which means stagnation and that is never positive as far as the market is concerned.
I am much happier with this scenario than one where they chase unprofitable business just to raise the top line.
I am down from where I bought in but when the divis are included I am at about break even so I am happy to hold as the cycle should turn in the next year.

[jonwig] 05/11/2014 09:08

Salpara - unfortunately the NAV (actually NTAV) is about the biggest determinant of general insurance company valuation.
It furnishes the capital buffer, and without capital adequacy they would not be allowed to make new business. However -

A.M. Best Company ("AM Best") has assigned an A (Excellent) financial strength rating on Lancashire Insurance Company Limited and Lancashire Insurance Company (UK) Limited. AM Best has also assigned a "BBB" issuer credit rating on Lancashire Holdings Limited. The outlook on all entities is stable.

Standard & Poor's Rating Services ("S&P") has assigned an A minus financial strength rating on Lancashire Insurance Company Limited and Lancashire Insurance Company (UK) Limited. S&P has also assigned a "BBB" long-term issuer rating on Lancashire Holdings Limited. The outlook on all entities is stable.

Moody’s Investor Service ("Moody’s") has assigned an "A3" financial strength rating to Lancashire Insurance Company Limited and Lancashire Insurance Company (UK) Limited. Moody’s has also assigned a "Baa2" long-term issuer rating on Lancashire Holdings Limited. The outlook on all entities is stable.

- explains the significant premium valuation.