Tuesday, August 24, 2004
Charley and Chaucer: part II
One benefit of investing in Lloyd's insurers over the alternatives is the more frequent reporting to the market of trading conditions. Most sectors report two trading statements a year plus interim and final results. A large number of companies only report results and any trading out of line with market expectations.
Lloyd's insurers give quarterly Syndicate Forecasts and an annual Syndicate Results announcement in addition to interims and finals. This arms the investor with extra information on which to base entry and exit points.
Chaucer, 24% of my portfolio, impressed the market today with Syndicate Forecasts and took the time to update shareholders and the market on exposure to claims over hurricane Charley:
Assessment of losses arising from Hurricane Charley remains necessarily judgemental at this stage although our current analysis is that Chaucer's gross and net exposures to this event will be within budgeted loss ratios...The continued good trading conditions, combined with further positive development of business written in 2002 and 2003, should, assuming normal loss patterns, produce another strong underwriting result for Chaucer in 2004...the 2004 year of account continues to progress favourably with gross premiums written, net of brokerage, ahead of the same stage for 2003 for all Chaucer Divisions.
The announcement reinforced my confidence with Chaucer and added fresh impetus for the shares to trade higher. Stock exchange combatants moved to acknowledge how excruciatingly cheap Chaucer has been trading. Chaucer shares rose 5.5% on the day to finish at 47p to sell. My disappointment with the share remains, Chaucer sells at the same price it started 2004.
Management confirmed interim results will be announced on September 20th. The indications point to increased profitability, which will hopefully force a rerating of the shares towards my target price, 66p.
The Artful Dodger
Lloyd's insurers give quarterly Syndicate Forecasts and an annual Syndicate Results announcement in addition to interims and finals. This arms the investor with extra information on which to base entry and exit points.
Chaucer, 24% of my portfolio, impressed the market today with Syndicate Forecasts and took the time to update shareholders and the market on exposure to claims over hurricane Charley:
Assessment of losses arising from Hurricane Charley remains necessarily judgemental at this stage although our current analysis is that Chaucer's gross and net exposures to this event will be within budgeted loss ratios...The continued good trading conditions, combined with further positive development of business written in 2002 and 2003, should, assuming normal loss patterns, produce another strong underwriting result for Chaucer in 2004...the 2004 year of account continues to progress favourably with gross premiums written, net of brokerage, ahead of the same stage for 2003 for all Chaucer Divisions.
The announcement reinforced my confidence with Chaucer and added fresh impetus for the shares to trade higher. Stock exchange combatants moved to acknowledge how excruciatingly cheap Chaucer has been trading. Chaucer shares rose 5.5% on the day to finish at 47p to sell. My disappointment with the share remains, Chaucer sells at the same price it started 2004.
Management confirmed interim results will be announced on September 20th. The indications point to increased profitability, which will hopefully force a rerating of the shares towards my target price, 66p.
The Artful Dodger
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