A lot of money rides on the weather. Just ask insurance operator XL Capital
Why the bullishness? Let's take a look.
CAPS member weiwentg, with a CAPS rating of 87.50, notes that the company "writes mainly long-tail insurance, which is insurance for liabilities that take a long time before they become known to the insured and are reported as claims. This makes for high reserve uncertainty, but allows them to hang on to and invest those reserves for longer periods."
And from CAPS member NetscribeInsuran: "The financial position of the company looks excellent with a solid return on equity, and its interest rate sensitivity completely diversified among U.S, U.K., and other European markets. It is trading at an attractive price with a lower book value [than] its peers."
In fiscal Q1, XL posted a 20% increase in net income and operating earnings of $3.03 per share. The book value is $54.95 per share, which translates into a fairly conservative 1.5 multiple.
Like big insurance peers Markel
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