RLI Has Pricing Power, Valuable Inflation Hedge, But For A Price

Jul. 19, 2021 4:08 AM ETRLI Corp. (RLI) StockGJNSF, GJNSY, RLI

Summary

  • Niche insurance means pricing power in an inflationary US environment.
  • No virus related coverage in case Delta variant becomes a major problem despite vaccinations.
  • Valuation is not excessive either, although premium.
  • Also Maui Jim, which management tried to highlight in the Q1 call, is not defining of a thesis in RLI.
  • Nonetheless, it overall seems a worthwhile exposure, although limited dividend and fair multiple gives us pause.
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US dollar holders and investors are no doubt increasingly concerned about inflation. While the EU has been less profligate in money printing and welfare, the US is seeing alarming month-on-month CPI growth. Our portfolio is almost entirely

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The Valkyrie Trading Society is a team of analysts sharing high conviction and obscure developed market ideas that are downside limited and likely to generate non-correlated and outsized returns in the context of the current economic environment and forces. They are long-only investors.

They lead the investing group The Value Lab where they offer members a portfolio with real time updates, chat to answer questions 24/7, regular global market news reports, feedback on member stock ideas, new trades monthly, quarterly earnings write-ups, and daily macro opinions.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of GJNSF either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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