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Lancashire - Money Making Machine With At Least 45% Upside

(Editors' note: Lancashire Holdings trades on the London Exchange under the ticker LRE.L with over £277M in average daily volume).

Lancashire Holdings (OTCPK:LCSHF) is a London-based niche insurance/reinsurance company with a track record of spectacular financial performance: average ROE of 19%, combined ratio of 60% and dividend yield of 10%.

The company trades at PE=10 (or forward PE=6.9), and the market currently attaches no value to its newly started/acquired businesses, which will increase 2014 earnings by 45%.

I view LRE as a money making machine that has grown its earnings even while paying out almost all of its income to shareholders. Management's track record, well capitalized balance sheet as well as company's leadership in specific insurance...

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