State Auto Financial Corporation: Attractively Priced, Moving Towards Profitable Underwriting And A Little Something Extra For Investors
- Close to book value, shares of this insurer offer value in an expensive market.
- After shuttering unprofitable areas of business, management is returning the company to profitable underwriting.
- As the company returns to profitable underwriting, investors can expect growth of book value and dividend increases in the medium term.
- With a majority of the company's shares controlled through a mutual structure, there is significant potential for a special situation known as a "mutualization" to occur.
- Should the company mutualize, minority shareholders will be taken out at a premium, as the company effectively takes itself private.