Lancashire Share Discussion Threads

[jrphoenixw2] 05/1/2018 08:23

Strange open this morning. Volume of 8.26k between 8-8.02am spiked the price 3.4% from 681.50 to 704.50. Presumably the offer side was very thin, but is there something else to it that escapes me as I'm rather puzzled.

[cwa1] 13/12/2017 08:00

Hmmmmmmmm. Think we might see a bit of a drift on opening now.

Lancashire Rated New Sell at Berenberg; PT 6 Pounds

[jrphoenixw2] 30/11/2017 10:40

Dire volume again, 56k at 10.30am. So against that context a -20k trade at 10.10am was able to drop the price 4p alone - Zzzz. I wouldn't want to have to trade any chunkier position right now.
Perhaps we'll have to wait for the rumour-mill to crank up pre the Q4 results in mid Feb-18 to see volume perking up.

- Interesting to see that since early last week, dips below 700p have found support...

[jrphoenixw2] 27/11/2017 14:49

Volume perking up, but a slab of that was a 180k 2-minute candle at 2.12pm. Perhaps a sell, mind you interesting to see it only spiked the price down 2p, and then only briefly.

For context, that 180k doubled the daily volume a/o 2.45pm

[jrphoenixw2] 27/11/2017 11:48

A mini-version of the double-bottom in September...

I was impressed with the rise during the first hour, but then I noticed the total traded volume was under 10k!

[solarno lopez] 27/11/2017 09:45

Lovely double bottom circa 700p on the chart

[jrphoenixw2] 20/11/2017 12:10

Google/Finance indicate a fat-finger trade this morning, either that or an error in Google's data.


11.12am sell 2,500 at 7.075 *pence*

Ouch, someone got lucky, and another saw £17.5k go up in smoke - the LSE list it too '11:11:25 20-Nov-2017 7.08[p] 2,500 [vol] 176.88 [value] O [Ordinary trade]

[jrphoenixw2] 18/11/2017 06:46

Woodford Equity Income Fund, monthly review issued yesterday.

'...These [new purchases] were funded through the disposal of two mid cap holdings, Equiniti and Lancashire. Equiniti has performed very strongly over the last couple of years and the position has now been sold to accommodate stocks which now look more attractively valued. Lancashire, meanwhile, has indicated that it will seek to deploy its capital in the firmer insurance rate environment that prevails in the aftermath of the severe hurricane season that we have just endured. Although we view this as a positive development because we believe the company will deliver an attractive return on this capital, its impact already appears to be fairly reflected in the price.'
hxxps://woodfordfunds.com/words/insights/weif-october-2017/

[jrphoenixw2] 10/11/2017 12:19

98% of full-day average volume by the 1/2 way point [12.15pm] of the session.
Per Google/Finance > 635,238/648,596

Some chunky trades going through especially yesterday with 2*2.5mm done at c4pm. Maybe a cross-trade of some type as it didn't shift the price? This morning there was a 500k trade/candle at 9.00am, which again didn't move the price. Does anyone know what these trades might be, as it seems counter-intuitive to me they're big, but seem to have no price impact?

12.17pm, price just broke above the Thursday high, after a few attempts, currently > 738.50 +11.00 (1.51%)

[jrphoenixw2] 09/11/2017 10:46

The spike up on the open to 738 at c8.30am was on the back of volume of ... wait for it ... 10,309, that's 1.8% of the trailing 30 (full) day average vol.
Zzzzz...

[speedsgh] 07/11/2017 10:03

Lancashire faces rate increases from clients and retrocession -

[garycook] 06/11/2017 09:15

Time to sell now then with only a 1.57% yield.Sold 4,300 shares this morning.Better returns else where atm.

[cwa1] 06/11/2017 08:26

A price target increase of >25% is quite a large quantum as these things go, they usually move them by a few coppers. Suggests that they've seen the last update as significant......or that they were hopelessly out of the loop before :-)

[jrphoenixw2] 06/11/2017 08:19

Yep, I was just looking at that:
'Lancashire Holdings Limited (LON:LRE) was upgraded by research analysts at HSBC Holdings plc to a “buy” rating in a report issued on Monday. The brokerage currently has a GBX 863 ($11.39) price target on the stock, up from their previous price target of GBX 683 ($9.01). HSBC Holdings plc’s target price would suggest a potential upside of 16.46% from the stock’s previous close.'

[cwa1] 06/11/2017 08:07

In case anyone was wondering about the "frisky" start:-

Lancashire Upgraded to Buy at HSBC

[jrphoenixw2] 05/11/2017 15:33

Transcript of their analysts call, typos, audio problems and all:



Nice to hear their confidence. They reiterate they expect renewal rates/ margins to begin improving from the start of 2018, and in Jun-18 they'll re-assess whether the sufficient profitable opportunity continues, to justify a capital raise to write more cover.

I infer if they're capital raising that makes Specials, that come from 'excess capital', unlikely. Perhaps the share price, vs the potential for a Special, is going to be the focus for investors well into 2018.

[garycook] 02/11/2017 12:42

Although insurance businesses aren’t always easy for investors to understand, in my experience they can be very profitable investments.

Today I want to look at two dividend stocks in the insurance sector, one of which I own myself — and both of which are owned by top fund manager Neil Woodford.
The specialist choice

Lancashire Holdings Limited (LSE: LRE) is a specialist insurer which provides insurance against assets such as aircraft, ships and oil rigs.

This year’s damaging hurricane season has brought to an end a run of quiet years without major payouts. The group’s return on equity for the third quarter has fallen to -10.4%, from +3.1% during the same period last year.

These losses aren’t unexpected. The group’s loss estimate of $106m-$212m is described as “comfortably within our expectations” by chief executive Alex Maloney.

For shareholders, there’s good news and bad. In the short term, the bad news is that the bumper special dividends paid in recent years will be stopped. Management believes that market conditions in 2018 will allow it to put fresh capital to work, so it won’t be returning spare cash to shareholders.

This means that the dividend yields of 7-10% enjoyed by shareholders will come to an end for now, at least. Instead, shareholders will get Lancashire’s ordinary dividend, which gives a yield of about 1.5% at current prices.

The good news is that the company believes that this year’s string of major catastrophes mean that insurance rates are likely to rise. Rivals who have been under-pricing risk could run into problems and securing higher rates now should support profit and dividend growth in the future.

During the years I’ve been following this company, management commentary has always been consistent and accurate. I’m not surprised that Lancashire shares have risen by 20% since late September and investors are pricing in a more profitable future.

I suspect we may get a chance to buy the shares more cheaply when market enthusiasm calms a little. In any case, I rate this stock highly as a quality business.

[jrphoenixw2] 02/11/2017 12:27

Invesco hiked their position to 18.31% on 23-Oct, ie. around 670p, and despite today, +10% since then. I wonder if there'll be any further position building today (longs!).
At roughly half-time, we're on 120% of average full-day volume.

ps.
Funny old times. The BOE hiking rates is commonly considered a negative for the FTSE, and positive for Sterling, but meanwhile [Telegraph]: 'The pound has plunged on the currency markets in reaction to the Bank of England's release, dropping 0.9pc against the dollar down to $1.3138.
That 7-2 vote split does appear hawkish and thus should be supportive of the pound but the commentary in the accompanying statement from the central bank is what has spooked traders.'

[speedsgh] 02/11/2017 11:24

Despite the lack of special dividend this time round, I took today's update as generally positive for the longer term. Hopefully the losses incurred in LRE's peer group over the quarter will help to sort some of the wheat out from the chaff.

[pimsim] 02/11/2017 08:03

2 takeaways from this.....

In the past, Special divis have been as much about the lack of opportunities to deploy surplus cash as they have about returns on capital. If the industry really is turning to higher premiums then LRE will want to deploy as much capital as possible and it is likely that special divis will not match the levels seen in the past (although normal divi should continue to grow at a faster pace).

Like every other industry sector, the insurance market has been heavily influenced by the surplus liquidity created by QE and investor's constant search for yield. New money coming into the market has been a major constraint on premiums for some time. Some of those new players may have burnt fingers at the moment but it will interesting to see if higher premiums can be sustained or whether the yield pulls in yet more surplus cash in a world still short of investment opportunities.

[jrphoenixw2] 02/11/2017 07:09

Whelan/CFO

"The third quarter of 2017 witnessed an extraordinary level of loss activity. With the occurrence of hurricanes Harvey, Irma and Maria and the Mexican earthquakes, the industry has incurred substantial losses. We have recorded a net loss across our three platforms from these events of $165.0 million, after recoveries and the impact of inwards and outwards reinstatement premiums. Our RoE is negative 10.4% and our combined ratio is 213.3% for the third quarter of 2017. Our RoE for the year to date is negative 5.1%. While we have incurred a loss in the quarter and for the year to date, we anticipate an improvement in rates following these events. Our outlook for 2018 is more positive than it has been for some time. We therefore do not intend to declare a special dividend this year; we expect to put all of our capital to work to take advantage of improving market conditions. However, we will continue to pay our standard ordinary dividend, in line with our stated dividend policy."

Direct link to results on the LRE site:

[jrphoenixw2] 02/11/2017 07:07

No Special div.

Mahoney:
'In previous years, following uneventful wind seasons, Lancashire has returned surplus capital to its shareholders by way of a special dividend. That is not the case this year. I am confident that the likely change in underwriting conditions affords us an opportunity to deploy the capital which we hold more advantageously, both to service the needs of our clients and their brokers and to continue creating long term value for our shareholders. Lancashire's strategy remains to maximise risk-adjusted returns across the insurance cycle."

[jrphoenixw2] 02/11/2017 06:55

For those waiting for the Q3 figures this morning [due in 5 minutes], some links: