Well best to start off with the company that I am into for the most at the moment. Catlin Group, which is a "is a leading global specialty insurer and reinsurer." their website is: http://www.catlin.com/
Now I am averaging 347.6p on these and the current price is 344p and with a recent dividend I am about even, they were up at about 366p a week or so ago, but have since dropped off. But I am not really concerned about this as if I sell some of my other shares I shall be buying more, even though I am rather heavy already (60% of my holdings are in Catlin, which I would not recommend to anyone to be so unbalanced, but I really do like this share).
So on to the reasons why I like Catlin... well they are currently on a P/E of 3.66, a dividend of just over 7% and while they have been hit by the earthquake in Chile and the BP problems in the Gulf of Mexico they were also punished for what was expected to be a very bad hurricane season in the US, which turned out to be a damp squib. On top of this they have net assets per share of 712.87¢ (445.5p) which means that you get about £1.295 for every pound you spend.
As they deal in major risks the earning do tend to fluctuate yearly, but looking at the earnings per share for the last 7 years they are averaging at 57p (diluted) which works out at a p/e of 6 and they are opening new offices outside of London to benefit from the higher returns they can achieve in less competitive markets. In addition they seem to be consistent in paying out dividends (it is always nice to see a company returning excess cash to shareholders rather than empire building for the sake of it) and since 2004 they have averaged at 38.1c (23.8p) which works out at 6.9%.
Now for some caveats, well they are in insurance so it is by definition somewhat risky (and price will take a hit when they get a big claim), but to offset the BP disaster Catlin did report increased business from companies drilling offshore wanting coverage. Their investment returns are not the greatest as they are being conservative in their portfolio, but then if they can generate such good returns without taking undue risks in their investments it could be seen as a good thing (however, there is always default risk etc, though my understanding is they are mainly weighted towards bonds which are not long term). Also premium rates are under pressure from over capacity in underwriting due to all the cash floating around with QE, which is why they are moving business out of London.
Finally a big plus for me (sorry not many negatives as I really like this one) is that the directors are big holders, but not overly so, as are some major investors and there are some rumours of Catlin being a potential takeover target. Predictions are for EPS of 43.5p for 2010 and 55.7p for 2011 and a dividend of 25.5p this year and 26.99p for next.
(figures from HSBC and Interactive Investor websites, but opinions are mine not theirs and do not take anything in this blog as an encouragement to buy or sell, do your own research, form your own opinions and do not take these calculations as factual, I have tried to be accurate, but you must get these figures yourself, as I might well have mistyped something or calculated incorrectly) Good hunting.
