CRM Holdings Trading for Less Than Liquidation Value

Bermuda based CRM Holdings (CRMH) is three businesses rolled into one. The Company manages Self Insured Groups (SIGs) and gets a nice stream of fees, they run a primary workers' comp insurance company called Majestic, and a Bermuda domiciled reinsurer called Twin Bridges.

CRM will earn $1.10 - $1.20 this year and has double digit returns on equity. Despite all of this, the stock trades for just above $7.00 per share.

A combination of depressed valuations in financial firms, overblown concerns about California workers' comp rates, lack of investor following (covered by one analyst), and the pitfalls of small-cap-land in general have made this stock a great bargain.

If Management were to sell the fee business and wind down the insurance operations, investors would get back at least $8.00 per share. It is worth taking a look at.

CRMH 1-yr chart

Disclosure: none

Comments

[Robert DiAl...:]

Not really impressed by this company.

2007 Jul 25 07:33 PM

[J Horowitz:]

Picked up 5,000 shares on Friday. Way too cheap. Take a look at the holders list too - some good shops in there...

2007 Jul 29 09:44 PM