Why Enstar Group Ltd. Is a Buy Today

This is why Enstar Group Ltd. is a buy today

Matt Koppenheffer
Matt Koppenheffer and David Hanson
Apr 7, 2014 at 7:00AM
Financials

In this segment from Thursday's Where the Money Is, Motley Fool financial analysts Matt Koppenheffer and David Hanson discuss Matt's stock pitch of the week, Enstar Group Ltd. (NASDAQ:ESGR). In the insurance world, insurers can start an insurance business, or a line of insurance, that ends up performing poorly. This can force the insurer to then put that line of insurance, or the entire business, into what is known as run-off. This means they are no longer selling policies, and will only continue to manage the existing policies for the life of those policies. That is where Enstar comes in.

Matt tells investors how Enstar's business of buying insurance lines or businesses that are in run-off has performed extremely well over the years. He discusses the value proposition for insurance companies to sell the portions of their business that are in run-off to Enstar, why Enstar has the ability to earn attractive returns this way, and what he loves about the company's management.