Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of specialty insurer Global Indemnity
So what: According to Global, one of those strategic options includes "discussions with potential acquirers," so it's no surprise that Mr. Market is bidding up the shares in anticipation of a buyout. Global has done well to navigate a difficult pricing environment over the past few years, but with its shares consistently trading well under book value (even with today's pop), management seems to be taking a more active approach in "unlocking" shareholder value.
Now what: I'd be careful about buying into the buyout buzz. In today's press release, Global made sure to note that "there can be no assurance that this process will lead to a transaction," so betting on the stock based purely on takeover-talk seems risky. Unless you'd be perfectly willing to own Global as a long-term standalone investment, it's probably best to watch the process unfold from a distance.
Interested in more info on Global Indemnity? Add it to your watchlist.
Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.
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