New Capital
Contrarian, deep value, long/short equity, special situations

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...

Join Seeking Alpha PRO to read this archived article and 11,574 other archived articles
FREESA PRO MEMBERS
IDEA GENERATORXExclusive access to 10 PRO ideas every day
INVESTING IDEAS LIBRARYXExclusive access to PRO library of more than 15,000 ideas
SECTOR EXPERT NETWORKXExclusive access to all sector experts for direct consultation
PERFORMANCE TRACKINGXTrack performance of all PRO stock ideas
PROFESSIONAL TOOLSXProfessional Idea Filters to zero-in based on industry, market cap and more
"In just the first month of using PRO, I used it to generate two ideas which were actionable for me. As a result of these two positions, I have earned more than 20 times the annual subscription costs for PRO."Michael Yagemann, Greenbridge Capital
"I am pleasantly surprised with the scope of small and mid-cap coverage PRO offers. You can't find that any where else."Patrick Rice, Mainstay Capital Management
You may cancel at any time for any reason, and receive a prompt refund for membership on months paid and not used (max. 6 months). Details