Lancashire Share Discussion Threads

[jrphoenixw2] 22/7/2017 18:03

... stake-building perhaps, or short-covering. Results due on Thursday.
Berkeley were +2.86% on the week; Odey is short both.

[garycook] 22/7/2017 13:04

Yes interesting.Something happening here.Perhaps LRE are being looked into with BEZ and HSX,or a stake is being accumulated in LRE.

[jrphoenixw2] 22/7/2017 11:37

Friday pm was interesting, as with much of the rest of the week a lack of volume through the morning then bam around noon it took off ending up with 165% of the 30-day average daily volume*. The price week-to-date on Thursday close was -1.4%, Friday alone was +2.8% for a full week of +1.4%. A turn-around on a Friday pm ending such a dull week took me by surprise.

* Vol/30-day vol
Mon 140/312k
Tue 324/309k
Wed 207/309k
Thu 181/309k
Fri 511/309k
Figures noted daily from the intra-day graphs at Google/Finance

[Presumably the 30-day average vol is only reset weekly [?] or similar, to remain un-altered as the week progresses].

[mister md] 21/7/2017 13:17

He has similar at DEBenhams, bit riskier than this, but then again, check out what happened at Sports Direct SPD over last 2 trading sessions ... (and its Sports Direct that has increased stake in DEB)...

[garycook] 21/7/2017 13:02

Martin,Because he is a prize prat that is losing a lot of money atm

[mister md] 21/7/2017 12:17

Why does Odey have such a large short position here ?

[garycook] 18/7/2017 12:36

Jrp,Look forward to that.

[garycook] 18/7/2017 08:17

Credie Suisse.Are too hard on any stock.I would love some more LRE at 610p.

[cwa1] 18/7/2017 08:04

Lancashire -1% CS INITIATE with UNDERPERFORM (Valuation)

[jrphoenixw2] 17/7/2017 17:50

Yep no kidding, I'd forgotten it was quite this thin though. Still it perked up nicely into the close :)

[garycook] 17/7/2017 14:07

Jrp,Summer time lull.

[jrphoenixw2] 17/7/2017 12:20

ZZzzzz.... At the half-way point, 12.15, the intra-day vol vs 30-day average is 15,576/312,335. That's under 10% of an average 1/2 day...

[gsbmba99] 10/7/2017 15:51

JRP makes some good points. I tend to see the company as good managers of risk. When returns are good (insurance premiums high) they take on more risk. When returns are lower, they reduce risk. Managing risk can mean writing more premiums (more risk) or offloading risk through buying reinsurance (reducing net risk) or dropping marginal clients. The latest quarterly investor presentation makes it clear that they have been purchasing more reinsurance at lower attachment points as part of their desire to lower net risk. They've been preparing for a large loss event for quite a while now and are likely to be relatively less affected. When a large loss event happens there will be less price competition as the ones left holding the bag will be retrenching. They're also holding a large surplus of capital in the event that the market turns this year in time for 1/1 renewals. The focus is on shareholder returns. Despite difficult market conditions for the last 5 years, Morningstar says that 10 year total return is mid-teens but I suspect a fair amount of that will have come from the assumed dividend reinvestment over multiple years, a 15-25% recent one-off impact of the decline in Sterling and the fact this used to trade on a low single digit multiple.

[garycook] 07/7/2017 04:54

jrp,Good Post.I have great confident in LRE also.I hope there not taken over.Has I enjoy the yearly Special along with Woodford and others investors here.Recently sold BEZ at 470,which was a mistake.Nevermind LRE one of my core holdings.

[jrphoenixw2] 06/7/2017 19:04

My take on it, my overview from holding it for c5 years now, and I'd be interested to hear other's views, is:
They underwrite insurance on major infrastructure, and that requires a material capital base, and good market knowledge. It's a niche market with few and fewer players [as take-overs happen]. They also seem adept at timing the underwriting cycle, writing more business when premiums are high then sitting back and pausing when competition for business rises and margins reduce. Ie. They don't chase higher risk underwriting for the sake of writing cover. So you have to expect the divs, esp. any Specials, to ebb and flow. It's not like Unilever or whatever, 50 years of ever-rising nominal divs, you kinda have to have faith in the LRE board to pay out what is in the company's/our long term best interests.
Added to which they operate with [roughly put] some forecast for their required future working capital, ie that required to underwrite expected business. This is not that unusual with insurers; where Special Divs from excess retained earnings can be a feature. So, any excess beyond required capital on the balance sheet rather than being retained for no explicitly profitable purpose, is returned to the owners of it, the shareholders.

- Oh and, a lot of business is written in US$, which with the battered Sterling exchange rate translates into more £.
- And there are headlines tonight like: 'Open season on Lloyd's insurance companies as sterling weakness makes them look cheap - Mid-cap underwriting firm Lancashire Holdings Limited (LON:LRE) defied the trend and was the best performing FTSE 250 constituent, up 4.8%, as sector peer Novae Group PLC (LON:NVA) succumbed to a takeover offer from AXIS Capital Holdings Limited.' [ it won't let me copy/paste the link, but it's from Proactiveinvestors .co.uk, dated today]

[11_percent] 06/7/2017 17:32

Anyone know why these guys make so mmuch cash.

All the money men want to buy them.

[jrphoenixw2] 06/7/2017 10:03

Not the best of days to be 9million short, poor Crispin.

[jrphoenixw2] 06/7/2017 09:28

That explains it, thanks.
[extract]
'Novae said it will be bought at 700.00 pence per share, a premium of around 20% to its closing price of 581.50p on Wednesday. This also represents a premium of around 29% to its volume weighted average closing share price for the month up to July 4, the last business day before the announcement.
The acquisition is also a 1.5 multiple of Novae's reported book value of GBP318.8 million as at December 31. Novae's market cap was GBP374.6 million at Wednesday's close. ...
A number of acquisitions in recent years has seen other insurers, such as Amlin PLC and Brit PLC, similarly bought by overseas rivals, the newspaper noted. Novae's takeover will leave just three specialist Lloyd's insurers listed on the London Stock Exchange, namely Beazley PLC, Hiscox Ltd and Lancashire Holdings Ltd.'

... LRE sits at the side like a damsel waiting to have her card marked for the last dance. I'm finding it impossible to trim/re-balance my position with this seemingly perpetual 'what if' in the background. Still, I'd rather wait in hope on the benches coining the div than be flayed alive on the floor like Odey with his -4.49% short, bwahaha

[11_percent] 06/7/2017 09:11

Ok, cheers.

[cwa1] 06/7/2017 09:07

Reaction to the NVA takeover this morning.

[11_percent] 06/7/2017 09:03

Yes, saw that.

Takeover???

[jrphoenixw2] 06/7/2017 09:00

Perky start to the morning. Over half the avg daily vol in the first hour, 167k/321k.
With the price +28.5p +4.01% it makes it the highest riser intra-day in the FTSE-250. It'll be interesting to see if any 'Major Holding' RNSs come out on the back of that.