Novae Share Discussion Threads

[jancarl1] 11/2/2008 09:38

Looks like we are having a bit of a breakout attempt today. What's up? Corporate action or appreciation of upcoming results?

[18bt] 08/2/2008 07:38

They have an initial assessment of 2007 year of account which means they must have looked at D&O exposures

[ursus] 07/2/2008 20:03

i've heard that they may have some d&o liabs from the current credit crisis. i know they've said not much but....

[jancarl1] 07/2/2008 17:47

The core message as I see it is the neutralization of the run-off and the neutralization of the rate reductions through NICL business, which would indicate stable results with EPS solidly above 3p for 2007 (producing net tangible assets of 35p plus in my book). We should further expect a dividend (1 to 1.5p?)and eventually a sale of the run-off portfolio. I would argue that this is as solid a story as there is in current market environment.



Current trading and prospects
A competitive rating environment on a broad front was a feature of
2007, with the overall impact of rate reductions being around 6%.These competitive conditions have persisted into 2008 and we do not
anticipate a strengthening of the trading environment before the end
of the year.
This cautious assessment of underwriting conditions restrains like
for like income growth, although income is being maintained by the
emerging importance of NICL, established in July 2006, and by the new
underwriting teams introduced since April 2006. The strategy of
pursuing new teams, steadily diversifying the business with
non-aggregated books of business, continues. Notwithstanding the
competitive market, opportunities for the Group to enhance
shareholder value remain.

[makingheaps] 06/2/2008 18:52

Can't see anything we didn't already know in todays announcement. 2007 result will improve embedded value. A re-rating surely must occurr at some point

[jancarl1] 16/12/2007 01:28

Sure, but why would you think so?

[effortless cool] 15/12/2007 17:04

I bet you it doesn't.

[jancarl1] 15/12/2007 14:24

Kiln is taken over at 1X 2006 revenues and 1.7 times book, which would indicate a range from 42p to 56p in NVAs case. Upside 26% to 68%. If NVA can demonstrate improvements in ROCE for 2007, it should be able to hit the upper end of the range.

[jancarl1] 12/12/2007 10:14

I think I still buy the idea, that diversification into uk commercial lines has some benefit as it mitigates the cyclicality of the Lloyds business. The proof in NVAs case is still to be seen. The latest buy-back of the convertibles to me would indicate that new business in both lines has slowed.

On the other hand this exercise in capital management would increase the profitability of the existing book and combined with a benign hurricane season and the lack of exposure to subprime indicates another year of strong profits and a return to dividends.

Add to that a little scent of corporate action in this undervalued sector and I would not call it dull.

[ursus] 11/12/2007 17:00

how do you all read novae at the moment? the loss provision is holding up, but what of the future? will it just be a dull little insurer of uk commercial lines etc?

[ursus] 11/12/2007 15:30

? bermuda again? - ie as for heritage.

note that the heritage "bid" comes from a co whose chief exec is also a non exec at chaucer.

[iroll] 11/12/2007 15:30

Thanks ursus

[jancarl1] 11/12/2007 15:28

Interesting times. I wonder who the bidder is? Any idea?

[ursus] 11/12/2007 15:25

kiln offer

[iroll] 11/12/2007 15:18

Can anyone explain the spike?

[iroll] 30/11/2007 12:36

Yes. Did so at 11.00am. 8000 @ 30.74p. Shows on PLUS Markets.

[red army] 30/11/2007 12:25

This looks to be a good entry point to add.

[geoffrey] 30/11/2007 12:19

Further Directors purchase just announced 1000 @ 30.5p.

[jancarl1] 30/11/2007 10:47

A few month ago they explicitly wrote in the interim report on 24th Sep 2007: "We have no exposure to US or UK subprime mortgage backed securities" (page 7, 2nd paragraph). To me that does not sound like a matter of opinion but a matter of fact.

[vikcom] 29/11/2007 19:24

the shares could have been hit by news from catlin that they have bonds exposed to the sub-prime market. looking at recent results from novae, they don't mention detail of their bonds.

a few months ago the bonds were probably viewed as a good risk for a high return.

i notice the recent large directors buys, but they were only give away options so not much of a show of confidence. i suppose we won't know until the result, by which time it will be too late if you are invested or thinking of buying.

[jancarl1] 29/11/2007 15:03

Why the big drop today? Any news I might have missed?

[jancarl1] 08/11/2007 19:18

I agree. We have seen a lot of consistency in promises and performance in the past 3 years. In my view, the turnaround is close to completion. I will call it completed once dividend payments are resumed as promised for next year. This in my view limits the downside, even if equity markets wreak havoc in the coming months. My target for March next year however remains at 50p.

[makingheaps] 08/11/2007 13:48

Another good set of figures today. Very good news that there was no useage of the provision for the first time and that the risk there is much diminished with a 49% reduction in outstanding claims. On the other hand the 6% premium reduction is like a profits warning but not unexpected. I can't see much progress in the current climate for equities generally but a return to 50p sometime next year seems very possible.

[18bt] 14/9/2007 08:27

I think we will need dividend payments to resume to get to 50p, but 40-45 look reasonable before Xmas. Pretty good result given exposure to UK floods. An undervalued share in an undervalued sector in a possibly undervalued market - good combination.

Risk on prior years now much reduced simply because the number of open claims has nearly halved, but still some Worldcom claims- a name that investors won't like.

[jancarl1] 14/9/2007 08:17

I must say that I am pleased. Solid business performance, little legacy, no sub-prime, still over-capitalized (NICL) and trading below NAV of 37.8p if you take the value of tax credit (3p) into account. Let's see what the hurricane season has in store, but without another Kathrina like disaster we will easily see 50p by next January. All Imho.