Corner of Berkshire & Fairfax Message Board

General Category => Investment Ideas => Topic started by: berkshiremystery on July 27, 2013, 07:48:42 AM

Title: ELF.TO - E-L Financial Corp. Ltd.
Post by: berkshiremystery on July 27, 2013, 07:48:42 AM
RE: http://www.cornerofberkshireandfairfax.ca/forum/investment-ideas/djco-daily-journal-corporation/msg124486/#msg124486

After I logged into the board in the last two days I got a little tsunami wave of private IM responses about my previous post in the DJCO thread about my mentioned little reclusive Canadian gem, a miniature baby-type of Fairfax. The company owners have high integrity and here at the board it was mentioned only once. They are totally reclusive and shun the public light,... the company owners aren't interested in any publicity, thus the shares almost have no liquidity, trade rarely and are still relative way below book value. And this might also be the crucifix of the problem that knowbody from the most knowledgable members here ever discusses this company. I would guess maybe 5-10 people here at the boards are aware of them, of course Norman Rothery, Francis Chou and also Third Avenue know them. This company, an insurance company could probably be mentioned right after Berkshire, Fairfax, Markel and Leucadia. They are E-L Financial Corp of Toronto, Canada, and are only a 5 minute walk away from Fairfax headquarters. The company is run by the reclusive Jackman family from Rosedale, Toronto.
 
I might finally start the thread about

(http://s17.postimg.org/vd2xi7t17/image.jpg). 
E-L Financial Corporation Limited.   (ELF.TO)
the little miracle at 165 University Avenue in Toronto

- Since 1969, the company’s book value has risen more than a hundredfold and over more than four decades it has suffered only four money-losing years.

- The Toronto-based company doesn’t have a website. It lacks a public relations department.

- E-L shares trade infrequently because the wealthy Jackman family of Rosedale, Toronto and a few institutional investors own most of the shares.

- Other value investors that are aware of this company include Third Avenue Mgmt. and Chou Associates, according to Bloomberg.

Source:

E-L Financial's stock price discount a tempting value play
May 01, 2012 (Update Sep. 10, 2012) The Globe & Mail
http://www.theglobeandmail.com/globe-investor/investment-ideas/e-l-financials-stock-price-discount-a-tempting-value-play/article4104087/
with opinions by our fellow board member Norman Rothery.

E-L Financial Corporation (ELF.TSX) @ The Globe & Mail
Financials, Quotes...
http://www.theglobeandmail.com/globe-investor/markets/stocks/financials/?q=ELF-T

-----

E-L Financial Corp. Ltd. (ELF.TO) -Toronto @ Yahoo! Finance
http://finance.yahoo.com/q?s=Elf.to&ql=1

E-L Financial Corp. Ltd. (ELFIF) - USA OTC Markets @ Yahoo! Finance
http://finance.yahoo.com/q?s=Elfif&ql=1


(http://s22.postimg.org/pnva17u9t/image.jpg)
Headquarters of E-L Financial at 165 University Avenue, 10th Floor, Toronto, ON M5H 3B8

(http://s24.postimg.org/mgmg5eu91/image.jpg)

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(http://s9.postimg.org/ttwnejkzj/image.jpg)

(http://s23.postimg.org/t3uc123jv/image.jpg)
Source: http://www.sedar.com/FindCompanyDocuments.do?lang=EN&page_no=1&company_search=E-L+Financial+&document_selection=0&industry_group=A&FromDate=26&FromMonth=10&FromYear=1997&ToDate=26&ToMonth=04&ToYear=2013&Variable=Issuer

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- E-L Financial's net equity value per Common Share at March 31, 2013 was $790.90.
     http://finance.yahoo.com/news/e-l-financial-corporation-limited-154021372.html
  The current market price per Common Share at July 24, 2013 was $645.
     http://finance.yahoo.com/q/hp?s=ELF.TO+Historical+Prices

Title: Re: ELF.TO - E-L Financial Corp. Ltd. (& the Jackman's)
Post by: hellsten on July 27, 2013, 08:15:43 AM
Thank you for posting. I will definitely have a closer look at ELF.TO. Stock price is up 60% in one year, so I guess I'm a bit late to the party :'(
Title: Re: ELF.TO - E-L Financial Corp. Ltd. (& the Jackman's)
Post by: ajc on July 27, 2013, 08:26:37 AM
Thanks, berkshiremystery.
Now I'm just hoping it doesn't end up on the front page of some well-known business paper in the Sunday edition!

(DJCO up 10% in 3 days, I'm still slowly bashing my head against the desk for having bumped your post on that...)
Title: Re: ELF.TO - E-L Financial Corp. Ltd. (& the Jackman's)
Post by: berkshiremystery on July 27, 2013, 08:29:36 AM
Thanks, berkshiremystery.
Now I'm just hoping it doesn't end up on the front page of some well-known business paper in the Sunday edition!

(DJCO up 10% in 3 days, I'm still slowly bashing my head against the desk for having bumped your post on that...)

I have researched probably over 50-100 web links about them,....
Title: Re: ELF.TO - E-L Financial Corp. Ltd. (& the Jackman's)
Post by: berkshiremystery on July 27, 2013, 08:38:55 AM
Since E-L Financial in Toronto doesn't maintain a website, someone might only get the annual reports in hardcopy form directly at:

E-L Financial Corp. Ltd.
165 University Avenue
10th Floor
Toronto, ON M5H 3B8

Phone: 416-947-2578
Fax:     416-362-2592

-----
Or from the Canadian type of EDGAR database at SEDAR.com

Company Search:  E-L Financial
Industry Group: All
Document Selection: All   
Sorted: By Issuer
Date From: October 26 1997
Date To: April 26 2013

Search results 1-100

Annual Reports PDF-files ----->>>>

http://www.sedar.com/FindCompanyDocuments.do?lang=EN&page_no=1&company_search=E-L+Financial+&document_selection=0&industry_group=A&FromDate=26&FromMonth=10&FromYear=1997&ToDate=26&ToMonth=04&ToYear=2013&Variable=Issuer

-----

SEDAR.com - Search for Canadian Public Companies
Main Search Form
http://www.sedar.com/search/search_form_pc_en.htm


======

Empire Life annual reports --->>>
http://www.empire.ca/consumer/about-us/annual-report/en/

Title: Re: ELF.TO - E-L Financial Corp. Ltd. (& the Jackman's)
Post by: NormR on July 27, 2013, 08:46:08 AM
Shhh, stop hyping my stocks.   ;)

It will be interesting to see what they do with the cash they get from The Dominion.  Also, the stock split at Algoma Central was unexpected.  I wonder if we might see one at the ELF.
Title: Re: ELF.TO - E-L Financial Corp. Ltd. (& the Jackman's)
Post by: berkshiremystery on July 27, 2013, 08:57:18 AM
Shhh, stop hyping my stocks.   ;)

It will be interesting to see what they do with the cash they get from The Dominion.  Also, the stock split at Algoma Central was unexpected.  I wonder if we might see one at the ELF.

I know,... they will get something like $1.1 billion...

Travelers to buy insurer from Canada's E-L Financial for $1.1 billion
Reuters - June 10th, 2013
http://finance.yahoo.com/news/travelers-buy-insurer-canadas-e-134954682.html

U.S. insurer Travelers Co Inc (TRV.N) said it would buy Dominion of Canada General Insurance Co from E-L Financial Co Ltd (ELF.TO) for about $1.1 billion to boost its presence in Canada.

=============




Of course their subsidiary companies Dominion of Canada General Insurance Co and also Empire Life maintain some web presence with some interesting company information also about ELF.

---

Empire Life @ Wokipedia.org
http://en.wikipedia.org/wiki/Empire_Life

The Empire Life Insurance Company (Empire Life or Empire Vie) is a Canadian life insurance and financial services company with its headquarters in Kingston, Ontario, Canada. It was incorporated in 1923 and is a subsidiary of E-L Financial Corporation Limited of Toronto, Ontario, Canada.

In 1968, E-L Financial Corporation Limited [2] acquired 94% of the outstanding shares of Empire Life. In 1987, E-L Financial acquired The Montreal Life Insurance Company, as well as the life insurance operations of The Dominion of Canada General Insurance Company, and adopted the marketing name of Empire Financial Group.


---

Empire Life & E-L Finincial Corp Ltd. Family Tree Chart of Corporate Structure....
http://www.empire.ca/consumer/about-us/our-company/corporate-structure/en/

(http://www.empire.ca/resources/images/assets/FamilyTreeEN.jpg)
Link source: http://www.empire.ca/resources/images/assets/FamilyTreeEN.jpg

Company History Overview ...
http://www.empire.ca/consumer/about-us/our-company/our-history/en/index.html




Significant events in Empire Life history
---------------------------------------------
2011 New visual identity introduced
2009 Surpassed $8.5 billion in assets under management
2008 Launch of Class Plus—segregated fund with guaranteed minimum withdrawal benefit (GMWB)
2008 The Company celebrates 85th anniversary
2007 In October, surpassed $1 billion in gross segregated fund sales (year-to-date)—a company record
2006 Marketing name change from Empire Financial Group to Empire Life
2002 Amalgamation with Concordia Life Insurance Company
2000 Assumption of annuity and registered retirement income fund (RRIF) block of policies of Coopérants, Mutual Life Insurance Society
1997 Acquisition of Colonia Life Insurance Company (name changed to Concordia Life Insurance Company)
1997 Assumption of deferred annuity block of policies of Allstate Life Insurance Company of Canada
1995 Agreement to administer and assume deferred annuity and RRIF block of policies of Confederation Life Insurance Company
1993 Acquisition of non-participating individual insurance policies of The Citadel Life Assurance Company
1992 Acquisition of a block of group business of The Metropolitan Life Insurance Company
1987 E-L Financial Corporation Limited brings together through merger and acquisition activities The Empire Life Insurance Company, The Montreal Life Insurance Company and the life insurance section of The Dominion of Canada General Insurance Company; adopt marketing name of Empire Financial Group
1970 Life insurance business in-force grows to $1 billion
1968 E-L Financial Corporation Limited is formed as holding company of Empire Life
1963 Empire Life acquires first computer
1957 Empire Life begins selling Group products
1936 Merger with Mutual Relief Life Insurance Company; Head Office moves from Toronto to Kingston, Ontario
1934 Acquisition of The Canadian Order of Odd Fellows insurance portfolio
1929 Merger with The Commonwealth Life and Accident Insurance Company
1926 The Company expands outside Ontario by opening a Branch Office in British Columbia
1923 The Empire Life Insurance Company is founded by Milton Palmer Langstaff in Toronto, Ontario

=====

Dominion of Canada General Insurance Company @ Wikipedia.org
http://en.wikipedia.org/wiki/The_Dominion_of_Canada_General_Insurance_Company

-----

Dominion of Canada General Insurance Company
http://www.thedominion.ca/
http://www.thedominion.ca/Mobile/Contact-Us.aspx
Title: Re: ELF.TO - E-L Financial Corp. Ltd. (& the Jackman's)
Post by: Liberty on July 27, 2013, 09:29:41 AM
Looked at them a couple years ago but passed. Maybe I shouldn't have  :-\
Title: Re: ELF.TO - E-L Financial Corp. Ltd. (& the Jackman's)
Post by: ajc on July 27, 2013, 09:32:49 AM
Thanks NormR and berkshiremystery, ELF seems like a really interesting idea.

I was just wondering if either of you have attended any of their annual meetings and maybe met the owners and management? If so, it'd be much appreciated if I could get either of your (or anyone else's) impressions of them.
Title: Re: ELF.TO - E-L Financial Corp. Ltd. (& the Jackman's)
Post by: berkshiremystery on July 27, 2013, 10:31:01 AM
Thanks NormR and berkshiremystery, ELF seems like a really interesting idea.

I was just wondering if either of you have attended any of their annual meetings and maybe met the owners and management? If so, it'd be much appreciated if I could get either of your (or anyone else's) impressions of them.

Nope, I haven't been to any AGM's and I don't know the Jackman's personally,
but if you search on the web about them, you will find a lot of info about them.

----

E-L Financial is owned by the Jackman family from Rosedale in Toronto.

List of Canadians by net worth @ Wikipedia.org
http://en.wikipedia.org/wiki/List_of_Canadians_by_net_worth
Richest Canadians (2011 statistics)
No. 58  Hal Jackman  $1.06 billion



"Hal" Jackman"
Henry Newton Rowell "Hal" Jackman @ Wikipedia.org
http://en.wikipedia.org/wiki/Hal_Jackman

Henry Newton Rowell "Hal" Jackman, OC, O.Ont, CD (born June 10, 1932 in Toronto, Ontario), served as the 25th Lieutenant Governor of Ontario from 1991 to 1997. He is the son of former Member of Parliament Harry Jackman and philanthropist Mary Rowell Jackman. His mother was the daughter of another former Member of Parliament, Newton Wesley Rowell. His sister, Nancy Ruth, is a philanthropist who was appointed to the Senate in 2005.

(http://www2.macleans.ca/wp-content/uploads/2008/12/ted19.jpg)
Source:http://www2.macleans.ca/wp-content/uploads/2008/12/ted19.jpg

and  @ http://www2.macleans.ca/2008/12/09/ted-rogers/

-----

His father was...

Harry Jackman
Harry Jackman @ Wikipedia.og
http://en.wikipedia.org/wiki/Harry_Jackman

Henry Rutherford "Harry" Jackman, OC (November 5, 1900 – November 22, 1979) was a Canadian politician and successful entrepreneur. He represented the electoral district of Rosedale in the Canadian House of Commons from 1940 to 1949.

In business, Jackman built the Empire Life group of financial service companies during the Great Depression.


-----

They have a family foundation that is donating a lot to Toronto art institutions and Hal's daughter Victoria Jackman is the executive director.

Hal Jackman Foundation
http://www.haljackmanfoundation.org/

Victoria Jackman (Executive Director)
http://www.haljackmanfoundation.org/contact-us/

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Design Exchange Black and White gala
Oct. 30, 2010 - The Globe & Mail
http://www.theglobeandmail.com/news/toronto/design-exchange-black-and-white-gala/article1370824/
Gala honouree designer Bruce Mau with Victoria Jackman, executive director of the Hal Jackman Foundation

-----

Victoria Jackman (executive director)
http://www.gettyimages.de/detail/nachrichtenfoto/executive-director-of-the-hal-jackman-foundation-nachrichtenfoto/83595753


-----

Great Spaces: inside the home of Victoria Jackman and Bruce Kuwabara
Toronto Life
http://www.torontolife.com/style/toronto-homes/2010/12/07/great-spaces-inside-the-home-of-victoria-jackman-and-bruce-kuwabara/

-----

Birth of a Museum

(http://Bata Shoe Museum) @ Bloor Street West, Toronto
http://www.batashoemuseum.ca/media/background/birth_of_museum.shtml

Mrs. Sonja Bata, Founding Chairman of the Bata Shoe Museum, and The Honourable Hal Jackman, then Lieutenant-Governor of Ontario, cutting the cake at the public opening of the Museum. May 6, 1995.

=====


An Hour with the Honourable Hal Jackman
March 7, 2013 Interview for Dolce Mag
http://www.dolcemag.com/successstories/an-hour-with-the-honourable-hal-jackman/13526

Quote: “I have no regrets about anything I've done. I think I'd do it all the same ”

-----

Hal Jackman: Too much gloom
Dec 30, 2008 Interview
http://www.canada.com/calgaryherald/news/calgarybusiness/story.html?id=a5cf8087-2722-4be5-aca1-23040b3d8925

-----

Black missed his calling: Jackman
National Post
http://www.financialpost.com/story.html?id=d6226a8a-c05c-497a-b928-8b44c2faf86c&k=89554

-----

Henry N. R. Jackman gives largest donation in the history of the Faculty of Law
University of Toronto
http://news.utoronto.ca/henry-n-r-jackman-gives-largest-donation-history-faculty-law

-----
Title: Re: ELF.TO - E-L Financial Corp. Ltd. (& the Jackman's)
Post by: constructive on July 27, 2013, 10:37:02 AM
Since 1969, they have increased book value by 12.2% annualized, correct?

Very good but not quite in the league of Berkshire or Fairfax. On the other hand, considering their size and new cash opportunity they might be positioned as well as Berkshire and Fairfax to hit 12% in the future.
Title: Re: ELF.TO - E-L Financial Corp. Ltd. (& the Jackman's)
Post by: berkshiremystery on July 27, 2013, 10:52:02 AM
Since 1969, they have increased book value by 12.2% annualized, correct?

Very good but not quite in the league of Berkshire or Fairfax. On the other hand, considering their size and new cash opportunity they might be positioned as well as Berkshire and Fairfax to hit 12% in the future.

They had in 1969 net common shareholders equity of      21,447,000
and have grown this equity in 2012 to about              2,981,537,000.

Maybe not quite impressive as BRK or FFH, but certainly at a good rate.
You should note that ELF recently traded not long ago at about half book value,
so a hypothetical 10% ROE would translate on half book value to about a 20% return  ;)
We have seen BAC and AIG some 12-18 months ago on a similar cheap scale with a comparable
hypothetical future ROE assumption.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: mranski on July 27, 2013, 01:24:48 PM

I believe they are involved with this company


http://www.ucorp.ca/ucl_nh.htm
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: benhacker on July 27, 2013, 02:18:25 PM
I think this was covered a few times on the old BRK board...

I thought it was covered here by Ron(?), but maybe I was thinking of the reference to Norm's article.

I have owned shares since 2010.  50-60% of effective book while their CEFs and hold co buy shares slowly is pretty low risk.  They seem kind of like Loews to me.  They won't shoot the lights out, but they are shareholder friendly and at a big book discount they will buyback.  Low risk good reward and tax efficient.

thanks for posting BRK Mystery.

Ben
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: berkshiremystery on July 27, 2013, 04:39:53 PM
Here's some biographical video about Hal Jackman. His son Duncan N. R. Jackman, the current CEO of E-L Financial also speaks in the video about his dad.

The Hon Henry N R Jackman - 2005 Champion of Public Education - The Learning Partnership
YouTube.com (6:28min Video)
http://www.youtube.com/watch?v=FtSNHGdV5A8

(http://s15.postimg.org/iqsil2t17/image.jpg)

(http://s17.postimg.org/4boz9p03j/image.jpg)

(http://s24.postimg.org/9idt8nn39/image.jpg)






Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: berkshiremystery on July 27, 2013, 04:53:24 PM

I believe they are involved with this company


http://www.ucorp.ca/ucl_nh.htm

E-L Financial operates as an investment and insurance holding company. It operates in three business segments:

- E-L Corporate,
- The Dominion and
- Empire Life.

The Company invests in equities and fixed income securities directly, and indirectly, through pooled funds, closed-end investment companies and other investment companies (E-L Corporate).

E-L Corporate investments include:
- United Corporations Ltd. (United),
- Economic Investment Trust Ltd. (Economic) and
- Algoma Central Corp. (Algoma).

The investments - corporate portfolio includes short-term deposits, common shares in public and private companies, units in pooled funds and units in a common contractual fund.

The Company owns
100% of The Dominion of Canada General Insurance Company (The Dominion) and
80%  of  The Empire Life Insurance Company (Empire Life).

Economic and United are both closed-end investment companies and Algoma is a shipping company.
Title: Re: ELF.TO - E-L Financial Corp. Ltd. (& the Jackman's)
Post by: NormR on July 28, 2013, 08:07:15 PM
Thanks NormR and berkshiremystery, ELF seems like a really interesting idea.

I was just wondering if either of you have attended any of their annual meetings and maybe met the owners and management? If so, it'd be much appreciated if I could get either of your (or anyone else's) impressions of them.

It's essentially a family company and I don't have any particular insight into the clan. 

As others have pointed out, they seem to be sensible investors but not as good as the folks at FFH/BRK/etc. 

The company falls into the generally undervalued bucket for me.  While I only hold a few shares, I like the company more as time goes on.  Just keep in mind that it was much less expensive not that long ago. 
Title: Re: ELF.TO - E-L Financial Corp. Ltd. (& the Jackman's)
Post by: berkshiremystery on July 29, 2013, 05:50:19 AM
Thanks NormR and berkshiremystery, ELF seems like a really interesting idea.

I was just wondering if either of you have attended any of their annual meetings and maybe met the owners and management? If so, it'd be much appreciated if I could get either of your (or anyone else's) impressions of them.

It's essentially a family company and I don't have any particular insight into the clan. 

As others have pointed out, they seem to be sensible investors but not as good as the folks at FFH/BRK/etc. 

The company falls into the generally undervalued bucket for me.  While I only hold a few shares, I like the company more as time goes on.  Just keep in mind that it was much less expensive not that long ago.

I would in general agree with Norm. Therefore I would put them at the last end/level of the chain of  those jockey stocks. I mean on the last level,... in relative long term book value growth over the decades. From 1969 to 2012,... over a hundredfold increase in common shareholders equity ($21M - $2.9B). BRK & FFH were compounding their equity on a much more compressed bases, faster and much steeper.

So my overview below applies only for their long term book value growth and their managerial skills of growing BV.

1) BRK
2) FFH,
3) ... LUK & MKL
4) ELF


But ELF has been quite undervalued in the last 12 months ($450-550, currently around $645), and were trading way, way below their intrinsic value (book value currently around $790 something, and rising) on a relative bases compared with BRK, FFH. So therefore ELF was only catching up. Of course they are currently not as cheaply anymore. I would consider them for any investors long term watch list, and of course only strike the perfect pitch, if they trade extremly depressed. A family run insurer that might be capable to achive a hypothetical 10% ROE trading extremely below book should give some good margin of safety in certain depressed market situations.
Title: Re: ELF.TO - E-L Financial Corp. Ltd. (& the Jackman's)
Post by: StubbleJumper on July 29, 2013, 05:54:31 AM
Thanks NormR and berkshiremystery, ELF seems like a really interesting idea.

I was just wondering if either of you have attended any of their annual meetings and maybe met the owners and management? If so, it'd be much appreciated if I could get either of your (or anyone else's) impressions of them.

It's essentially a family company and I don't have any particular insight into the clan. 

As others have pointed out, they seem to be sensible investors but not as good as the folks at FFH/BRK/etc. 

The company falls into the generally undervalued bucket for me.  While I only hold a few shares, I like the company more as time goes on.  Just keep in mind that it was much less expensive not that long ago.


IMO, it was much less expensive a couple of months ago because the $1.1B that they'll receive in the fall for the Dominion company is nearly enough to take this sucker private....  So, if they do opt to take the $1.1B, add a wee bit of debt and take it private, what price to they offer?  Adjusted BV per share is still north of the current market price.  Would the current market price of ~$645+30% do it?  That would roughly equate to adjusted BV....

SJ
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: berkshiremystery on July 29, 2013, 06:16:17 AM
Thanks NormR and berkshiremystery, ELF seems like a really interesting idea.

I was just wondering if either of you have attended any of their annual meetings and maybe met the owners and management? If so, it'd be much appreciated if I could get either of your (or anyone else's) impressions of them.

It's essentially a family company and I don't have any particular insight into the clan. 

As others have pointed out, they seem to be sensible investors but not as good as the folks at FFH/BRK/etc. 

The company falls into the generally undervalued bucket for me.  While I only hold a few shares, I like the company more as time goes on.  Just keep in mind that it was much less expensive not that long ago.


IMO, it was much less expensive a couple of months ago because the $1.1B that they'll receive in the fall for the Dominion company is nearly enough to take this sucker private....  So, if they do opt to take the $1.1B, add a wee bit of debt and take it private, what price to they offer?  Adjusted BV per share is still north of the current market price.  Would the current market price of ~$645+30% do it?  That would roughly equate to adjusted BV....

SJ

If you have hawk like eyes, you might also see that certain holdings are also quite below their actual intrinsic value. Just have a look at United Corps.  ;)

ELF owns more than half of United Corporations, a closed end fund that’s been around for almost a century and which is now consolidated at the E-L level.

1st qtr 2013 common equity $860.85 M
  http://www.theglobeandmail.com/globe-investor/markets/stocks/financials/?q=UNC-T&page=balanceSheet&frequency=QUARTERLY#financials-content

July 26, 2013 market cap $769.45 M
http://www.theglobeandmail.com/globe-investor/markets/stocks/summary/?q=UNC-T

------

No way that E-L Financial and asset flipper can be used in the same sentence
2013-06-10 NationalPost
http://business.financialpost.com/2013/06/10/no-way-that-e-l-financial-and-asset-flipper-can-be-used-in-the-same-sentence/

In what seems like a Buffet-like approach to selling parts of the overall business, E-L announced Monday the sale of its The Dominion of Canada General Insurance Co. to the Travelers Companies Inc. – a $1.125 billion divestiture.

“We are extremely proud of what The Dominion team has achieved over the years. We could not be happier that Travelers, a highly respected and well capitalized firm, will be the platform for future growth and success,” stated Duncan Jackman, E-L Financial’s chief executive officer and Hal’s son. The company was formed in 1887.











Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: StubbleJumper on July 29, 2013, 07:12:16 AM
Thanks NormR and berkshiremystery, ELF seems like a really interesting idea.

I was just wondering if either of you have attended any of their annual meetings and maybe met the owners and management? If so, it'd be much appreciated if I could get either of your (or anyone else's) impressions of them.

It's essentially a family company and I don't have any particular insight into the clan. 

As others have pointed out, they seem to be sensible investors but not as good as the folks at FFH/BRK/etc. 

The company falls into the generally undervalued bucket for me.  While I only hold a few shares, I like the company more as time goes on.  Just keep in mind that it was much less expensive not that long ago.


IMO, it was much less expensive a couple of months ago because the $1.1B that they'll receive in the fall for the Dominion company is nearly enough to take this sucker private....  So, if they do opt to take the $1.1B, add a wee bit of debt and take it private, what price to they offer?  Adjusted BV per share is still north of the current market price.  Would the current market price of ~$645+30% do it?  That would roughly equate to adjusted BV....

SJ

If you have hawk like eyes, you might also see that certain holdings are also quite below their actual intrinsic value. Just have a look at United Corps.  ;)

ELF owns more than half of United Corporations, a closed end fund that’s been around for almost a century and which is now consolidated at the E-L level.

1st qtr 2013 common equity $860.85 M
  http://www.theglobeandmail.com/globe-investor/markets/stocks/financials/?q=UNC-T&page=balanceSheet&frequency=QUARTERLY#financials-content

July 26, 2013 market cap $769.45 M
http://www.theglobeandmail.com/globe-investor/markets/stocks/summary/?q=UNC-T

------

No way that E-L Financial and asset flipper can be used in the same sentence
2013-06-10 NationalPost
http://business.financialpost.com/2013/06/10/no-way-that-e-l-financial-and-asset-flipper-can-be-used-in-the-same-sentence/

In what seems like a Buffet-like approach to selling parts of the overall business, E-L announced Monday the sale of its The Dominion of Canada General Insurance Co. to the Travelers Companies Inc. – a $1.125 billion divestiture.

“We are extremely proud of what The Dominion team has achieved over the years. We could not be happier that Travelers, a highly respected and well capitalized firm, will be the platform for future growth and success,” stated Duncan Jackman, E-L Financial’s chief executive officer and Hal’s son. The company was formed in 1887.



You're bang-on.  ELF has a number of securities that it knows well and could purchase that are currently selling for well below BV/IV.  Their own shares are what I suggested, but United and Economic chronically sell at a significant discount to a sum-of-the-parts market valuation.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: StubbleJumper on November 08, 2013, 01:39:09 AM
So ELF has announced a $75 special dividend, which should account for roughly $300m of the $1.1B that they're getting from the sale of the Dominion.  After blowing $300m on a special dividend, it now seems unlikely that the Jackmans will try to use the Dominion sale proceeds to take ELF private.

Yesterday the common shares closed at $740/sh.  The share price is getting perilously close to adjusted book value.  I'm thinking that this might be a good time to sell as I can't see much potential for the remaining lifeco plus the cash being valued much above book.

Anyone else selling?


SJ
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: NormR on November 08, 2013, 06:03:45 AM
Well, it traded at 1.4 times tangible book value in 2006, according to S&P Capital IQ.  But discounts have been more common.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: StubbleJumper on November 08, 2013, 08:52:07 AM
Well, it traded at 1.4 times tangible book value in 2006, according to S&P Capital IQ.  But discounts have been more common.


True, valuations were a bit steeper in the past.  I guess I'm looking at Empire Life from the perspective of reasonably plausible levels of interest rates over coming years.  But, who knows....
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: benhacker on November 08, 2013, 10:40:29 AM
I blew out all my ELF yesterday.  I think my average was in the $400-425 CAD.  Felt like the right time to sell.  I like the company, but was only a ~2% position or so and I didn't have high conviction without the massive P/B discount.

Ben
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: StubbleJumper on November 25, 2013, 09:41:02 AM
I finally blew mine out the door a couple of weeks ago at $750/sh.  Interesting that it keeps creeping up.  If my memory serves me correctly, at its current price of $780 it's within 5% of adjusted book. 

If somebody told me a year ago that ELF would be back near book in 2013, I would not have believed him!
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: Aberhound on April 17, 2014, 06:23:39 PM
Is there any disclosure of the stock holdings held by corporate? Basically they sold Dominion for $1B and increased their investments in securities by $1B with $600M of the $1B invested into US securities. The now have $3B in equities. Dominion had a worsening combined loss ratio so the company de-risked by exchanging Dominion for equities. The track record of the corporate investment returns look very good. Has anyone calculated the return on the investments in securities? My impression of the numbers is that they are very good. The growth in book value is not an accurate record of the investment performance at corporate because of the drag caused by Dominion and the fact that Empire manages its own much bigger investment portfolio and the distortions caused by the controlled entities. Jackman the CEO is only 46 so is this a young jockey stock to hold many years? It looks like he is focused on increasing the corporate equity investment holdings as he has increased it dramatically to $3B. He doesn't brag about his results like Buffett or Prem which I like if I am going to accumulate shares over a long time.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: no_free_lunch on April 27, 2015, 11:54:39 AM
ELF is currently trading around 2/3 book which looks like the lower end of p/b over the past decade.   Seems very reasonable given the TSX is near highs.   Anyone have theories on why shares have traded down, is there significant O&G exposure?
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: notorious546 on January 06, 2016, 10:37:59 AM
i just started look at this name. seems like book value has caught up with the premium placed on the shares. looks like about 2/3rds of book value right now. 2.8 billion in market capital and only 465 shares traded today! liquidity is just crazy low.

anyone adding or holding here?
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: bbarberayr on January 07, 2016, 05:19:54 PM
ELF is primary a life insurer now with a big investment portfolio.  Many life insurers are trading at substantial discounts to book value, even large ones like MET is at similar p/b.  P&C insurers, like they used to have with Domnion insurance, are trading at higher p/b valuations as they are seen as lower risk as their claims are shorter term and do not have the long tail liabilities that the lifeco's have and need to find through (current) low rate long term bonds.

But if you want a life insurer and don't mind one that is thinly traded, family controlled with a small dividend, ELF should do well as Canada has an oligarchic life insurance market, is cheap, conservatively run.

If you are willing to go to the US, NWLI has similar characteristics, but is cheaper and more consistent earnings.  KCLI has a better dividend, but is now trading on the OTC market, so that may make it hard to trade.

I think if you buy a company like ELF.TO or NWLI, you will be well rewarded as interest rates normailze and that stock approaches an ever-increasing book value.  I think it is more of a question of when, not if and the timeframe will drive your annual return.

Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: SafetyinNumbers on February 04, 2016, 03:54:12 AM
A very important recent development is the purchase of the minority stake in Empire Life at book value. It's important because it now allows E-L Financial to sell Empire Life at a premium like they did for Dominion. One of the reasons for selling Dominion was that it didn't have the scale to compete and the same could be argued for Empire Life. A sale would likely be done at a premium to book thus making the NAV higher than the accounting book value as all of the major Canadian life insurers would compete for the asset.

A way to get a clue on what else ELF owns is to look at the holdings of UNC and EVT. Both are closed end funds that ELF manages and has giant stakes in. Actually, buying EVT might be a cheaper way to acquire ELF as EVTs biggest holding is ELF and EVT trades at a big discount to NAV.

Long ELf and EVT.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: bbarberayr on February 04, 2016, 05:55:37 PM
You could be right about selling Empire Life.

Since Hal Jackman got out of the business and the son took over, a lot of things are lining up - the consolidation of Empire Life you mentioned, but also the sale of Dominion and the change in dividend policy in EVT to distribute all dividends, not just a token one.

There is not a lot of value in being public for this group of companies as they continue to slowly buy up the outstanding shares reducing the float.  They also never come to market to raise capital.  Would be cleaner to just run as a family business and not have to deal with 3rd party shareholder and they could get rid of the costs of being public.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: StubbleJumper on February 04, 2016, 07:07:53 PM
So, they sold Dominion and if they sell Empire Life, what's left?  Algoma, United and Economic?  I don't get it.  Makes no sense unless the Jackman family just wants to own passive investments and live a comfortable life from their billions in capital...
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: bbarberayr on February 05, 2016, 05:12:33 AM
Exactly.  And focus on the things you like your charities or whatever you like.  Maybe the son has different interests than the father did.

Tough to be a mid-sized insurer in Canada these days.  You don't have the scale of the big 3, but you don't have the focus and cheapness of the small ones like Lutheran Life for example.

Mutual Life, London Life, Canada Life, Standard Life, Zurich Life, etc. are all gone and you are left with Manulife, Great West and Sunlife controlling 80% of the market and then Empire Life trying to still go alone.  I was talking to a broker and he likes working with Empire because their prices are good, but tough to compete on price when you are the small guy.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: SafetyinNumbers on March 02, 2016, 12:22:23 PM
Pretty good quarter out of ELF with book value up to $1089 vs the $635 price and a 1000% increase in the dividend to $1.25/quarter from 12.5 cents/quarter.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: NormR on March 02, 2016, 01:19:03 PM
Pretty good quarter out of ELF with book value up to $1089 vs the $635 price and a 1000% increase in the dividend to $1.25/quarter from 12.5 cents/quarter.

That sweet 0.2% yield ;-)
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: SafetyinNumbers on March 02, 2016, 01:44:36 PM
0.8% yield! That's a quarterly dividend!

Obviously not a meaningful yield but a big change for them in terms of policy as the quarterly dividend has been 12.5c/quarter for at least 20 years.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: NormR on March 02, 2016, 02:51:08 PM
0.8% yield! That's a quarterly dividend!

Obviously not a meaningful yield but a big change for them in terms of policy as the quarterly dividend has been 12.5c/quarter for at least 20 years.

Hot damn, that'll teach me to not skim the press release!  I'm waiting for the 10-for-1 share split  :)
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: Studesy on March 03, 2016, 07:24:24 AM
Pretty good quarter out of ELF with book value up to $1089 vs the $635 price and a 1000% increase in the dividend to $1.25/quarter from 12.5 cents/quarter.

That sweet 0.2% yield ;-)

Apparently someone doesn't like the news.  I've had limit orders in the $627 range unfilled for the last 2 months.....to my surprise they were filled yesterday!  Not that this is a large decline... just seems unusual that this occurred alongside a solid earnings release and div increase....or am I missing something??
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: KinAlberta on November 23, 2016, 01:14:10 PM
Any following ELF lately?

A bit of a bump up likely on qrtrly results.


Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: notorious546 on November 23, 2016, 02:32:35 PM
Any following ELF lately?

A bit of a bump up likely on qrtrly results.

I'm still following it. Still overcapitalized and growing book value moderately. Higher interest rates are still good for the company. not sure if there are any catalysts that will narrow the valuation gap or at least easily visible ones.

E-L Financial’s net equity value per Common Share was $1,132.28 at September30, 2016, an increase from $1,089.23 as at December31, 2015.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: SafetyinNumbers on November 23, 2016, 11:12:36 PM
The only thing I can think of, is a potential sale of Empire Life and a special dividend like they did after they sold the P&C business. We have seen life insurance valuations go up significantly recently so its potentially easier for one of the big insurers (GWO, SLF or MFC) to buy Empire at a big premium to book. This will of course take the ELF NAV even higher.

Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: bbarberayr on November 29, 2016, 05:34:06 PM
EVT, the top company in the Jackman family holdings and owner of a lot of ELF (can't remember exactly) also changed their dividend policy a couple years ago from a flat $0.60 per year to $0.15 per quarter, plus distributing all the dividends of the investments that EVT owns.  So, since Duncan Jackman has taken over from Hal, we've seen a significant increase in the activities which uncover shareholder value - the EVT dividend, the sale of P&C division Dominion insurance, and now the increase in dividend at ELF.

My hope is that the new management continues these actions and we see an increase in the valuation given to all of these companies.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: SafetyinNumbers on November 30, 2016, 11:51:33 PM
Perhaps we will.

In my conversations with Duncan, he seems to like the discount to the extent it allows the family to acquire more shares at that big discount.  I also think the higher dividends gives them more cash to buy those shares of UNC, EVT and ELF. If they keep buying, theoretically the discount will close over time.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: no_free_lunch on December 16, 2016, 02:54:10 PM

E-L Financial’s net equity value per Common Share was $1,132.28 at September30, 2016, an increase from $1,089.23 as at December31, 2015.

Notorious,

Where did you find this net equity value?  I don't see it in the financials and when I calculate it I get a different number.  No doubt I am just missing something so any help is appreciated.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: SafetyinNumbers on December 16, 2016, 09:56:51 PM
Hopefully Notorious doesn't mind me answering but its on page 4 of the MD&A or page 3 of the financial statements in the highlights. Just make sure you are pulling up E-L Financial and not Empire Life off of Sedar.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: no_free_lunch on December 17, 2016, 06:01:48 AM
Thanks!
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: SafetyinNumbers on December 28, 2016, 04:33:45 AM
Write up on SeekingAlpha http://seekingalpha.com/article/4032732-e-l-financial-trading-nav-potential-value-accretive-catalysts
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: notorious546 on March 03, 2017, 10:52:26 AM
stock was highlighted in the last value investor insight issue FWIW.

Q4/16 results out. Shares at 65% of book value while book grew 6% year over year.

Quote
TORONTO, ONTARIO--(Marketwired - March 3, 2017) - E-L Financial Corporation Limited ("E-L Financial") (TSX:ELF)(TSX:ELF.PR.F)(TSX:ELF.PR.G)(TSX:ELF.PR.H) today reported for the year ended December 31, 2016, consolidated shareholders' net income of $333.1 million or $80.88 per share compared with $534.6 million or $132.18 per share in 2015. For the fourth quarter of 2016, E-L Financial had consolidated net income of $100.1 million or $24.49 per share compared with $207.7 million or $51.90 per share in 2015.

E-L Financial's net equity value per Common Share was $1,159.26 at December 31, 2016, an increase from $1,089.23 as at December 31, 2015.

"Empire Life continues to deliver strong results with record earnings for 2016 despite challenges associated with the current economic and political environments along with the impact of low interest rates. With a common shareholder return of 13%, Empire Life continues to demonstrate sustained profitable organic growth. Although E-L Financial's investment returns declined from 2015, which were mostly driven by currency movements, the global investment portfolio has had continued momentum through 2016. I am proud to report continued growth in our net equity value to our common shareholders with a total return of 6.8% for 2016," said Duncan Jackman, Chairman, President and CEO of E-L Financial.

E-L Corporate

For the year ended December 31, 2016, E-L Corporate earned net income of $181.6 million compared to $447.2 million in 2015. The decrease in net income is primarily due to E-L Corporate's net gain on investments of $155.8 million compared to $568.9 million in 2015. E-L Corporate's investments in 2016 yielded a pre-tax total return of 6% mainly due to positive investment returns on global equities which was partially offset by the strengthening of the Canadian dollar against the U.S. dollar and Euro. The net gain on investments in 2015 was mostly attributed to the favourable impact of a lower Canadian dollar. At December 31, 2016, 84.0% (2015 - 85%) of E-L Corporate's investments were denominated in foreign currencies with 49% (2015 - 48%) and 12% (2015 - 14%) exposed to U.S. and European equities respectively.

E-L Corporate 2016 fourth quarter net income was $47.9 million, a decrease of $146.8 million compared to 2015. The return on investments for the fourth quarter decreased compared to the prior year primarily due to lower investment returns and the impact of foreign currencies in the fourth quarter of 2015.

Empire Life

For the year ended December 31, 2016 Empire Life's net income attributable to E-L Financial was $151.5 million compared to $87.4 million for the comparable period in 2015. The increase in net income was due to higher profits from the Individual Insurance product line primarily resulting from improved stock market conditions in 2016, a favourable update of policy liability assumptions and management actions to improve asset/liability matching in 2016.

Empire Life's fourth quarter net income attributable to E-L Financial was $52.1 million compared to $13.0 million in 2015. The increase in net income was primarily due to higher profit from the Individual Insurance product line primarily attributable to improved stock market conditions in 2016, a favourable update of policy liability assumptions for the Individual Insurance product line in 2016 (compared to an unfavourable update in 2015) and management actions to improve asset/liability matching in 2016.

Empire Life's assets under management (including segregated fund and mutual fund assets) increased 10% over December 31, 2015 levels to reach $16.1 billion.

Empire Life's Minimum Continuing Capital and Surplus Requirements ratio increased to 248% at December 31, 2016 compared to 201% at December 31, 2015 resulting from Empire Life's issuance of $149.5 million of preferred shares during the first quarter of 2016 and the issuance of $200 million of subordinated debentures during the fourth quarter of 2016.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: notorious546 on March 03, 2017, 10:53:26 AM
Write up on SeekingAlpha http://seekingalpha.com/article/4032732-e-l-financial-trading-nav-potential-value-accretive-catalysts

can you post article can't seem to read/get access to it?
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: no_free_lunch on March 03, 2017, 11:14:57 AM
Thanks for the link notorious.

It is still on the cheaper side based on a simple price to book comparison.  I like that book has increased despite what is happening with bond yields.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: SafetyinNumbers on March 03, 2017, 01:53:39 PM
Write up on SeekingAlpha http://seekingalpha.com/article/4032732-e-l-financial-trading-nav-potential-value-accretive-catalysts

can you post article can't seem to read/get access to it?

I can't it went premium so I don't have access either.

One interesting way to play ELF is to buy EVT which is a closed end fund where over 40% of the NAV is ELF. It also trades at over a 25% discount to NAV so its a bit of a double discount and it has lagged ELF lately. There is some cross ownership as well as EVT's biggest shareholder is ELF!
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: SafetyinNumbers on March 04, 2017, 09:36:34 AM
I want to point out that E-L has been doing a good job growing Empire Life since they bought the 20% they didn't already own in 2015. Since then the book value has grown over 20%. It's important to note that if they sold Empire Life, it would sell at a multiple of book which implies the actual NAV is actually a decent amount higher. Empire Life is around $300/share of the $1159.26 NAV. The last large transaction in Canadian life insurance was Manulife buying Standard Life for about 19.5x EPS and 1.9x book value. Based on 2016 results, this would put Empire Life worth around $575-725/share for ELF.

I'm not sure what the tax basis is for Empire Life is but even if its somewhat nominal, there is a real argument that the NAV here is closer to $1400 after tax vs the stated $1159.

There is seemingly no rush to sell Empire Life and last quarter ROE was 17% so perhaps it's in our best interest that they keep growing it and sell it when the outlook dims.

Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: no_free_lunch on March 04, 2017, 10:00:21 AM
Safety,

This is good to hear.  It is very cheap based on your assumptions and crazy cheap when you look at the market at large.  I have read that they are very prudent on asset sales / purchases so probably are just waiting for multiples to heat up a bit more.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: SafetyinNumbers on March 04, 2017, 03:20:17 PM
The lack of liquidity, high stock price and the fact that it's not in any index keep retail and institutional investors away alike.

Management also does zero to promote it and slowly buys the stock of ELF and the closed end funds EVT and UNC. It's like sneaking going private story!
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: bizaro86 on March 07, 2017, 06:25:31 AM
You know they aren't promotional when they don't have a website!
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: SafetyinNumbers on May 08, 2017, 04:11:41 PM
Anyone going to AGM in Toronto this week? It's one of the few chances to talk to management given the lack of conference calls.

They will also report Q1 that day and I expect NAV should increase by about 4%. It's a very crude estimate! However, if correct will take NAV to about C$1200 versus the recent quote of C$816. Of course, as I noted in a post above, the NAV discount looks a lot bigger if Empire Life is valued on the basis of what it would sell for to one of the big three versus book value.

Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: SafetyinNumbers on May 10, 2017, 09:56:46 AM
The quarter ended up being a bit better than expected.

Discount to NAV stands at 33%.

Duncan made the point at the meeting that now that Empire Life has ROE's north of 15%, the discount to book seems unwarranted.

http://www.marketwired.com/press-release/e-l-financial-corporation-limited-announces-march-31-2017-financial-results-tsx-elf-2215419.htm
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: no_free_lunch on May 10, 2017, 06:12:02 PM
If they want to close the discount some type of dividend or share repurchase might be necessary.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: SafetyinNumbers on May 10, 2017, 07:02:37 PM
They do have a dividend but it's tiny.

I don't think they really care about closing the discount per se. The family is usually adding to their position over time. Maybe one day they take it private.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: SafetyinNumbers on May 22, 2017, 02:42:12 AM
Article in the Financial Post from last week with ELF as a top pick.

http://business.financialpost.com/investing/buy-sell/this-fund-manager-is-sticking-with-quality-despite-the-allure-of-cheaper-names
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: no_free_lunch on May 22, 2017, 10:25:29 AM
Great link.  Just wanted to pull a snippet from it.  Basically just affirms what you have been saying.

Quote
“It’s got profitability measures that are as attractive as the other public life insurers,” Cooke said, noting that those names trades at roughly 1.5x book value, while E-L trades closer to 0.7x.
..
Netting out what he thinks the insurance business is worth, Cooke believes E-L’s collection of corporate investments is trading at about 50 or 60 cents on the dollar.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: EliG on May 22, 2017, 12:08:48 PM
Article in the Financial Post from last week with ELF as a top pick.

http://business.financialpost.com/investing/buy-sell/this-fund-manager-is-sticking-with-quality-despite-the-allure-of-cheaper-names

It's funny that the article didn't mention -- even in passing -- their big loss on Home Capital:

https://www.qvinvestors.com/Commentary?id=19119

They owned ~13% of HCG before they dumped the shares at the end of April. Their ACB was in the high 20s / low 30s. They sold around $7 or $8.

Two weeks later, they are giving interviews about "sticking with quality". ::)
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: no_free_lunch on May 22, 2017, 02:46:37 PM
True and honestly I have never heard of the company before but they have kicked the markets butt in the past 3,5,10 years and also since inception.  People on this board said the turtle creek and mawer had positions in HCG.  Donville Kent also had a position, maybe still does, and has written the stock up at least once.  I am not trying to make excuses but it fooled a lot of people so I wouldn't ignore their analysis in general.

I just look at this type of thing as another set of eyes and more importantly publicity for ELF.  They just aren't going to go out and sell the story themselves.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: SafetyinNumbers on August 04, 2017, 06:05:49 AM
ELF reported Q2 last night. NEV/share increased to $1241.48 so at the current stock price of $840, the NEV discount is around 32%. Overall the NEV is up 7% this year so far.

https://www.globenewswire.com/news-release/2017/08/03/1072324/0/en/E-L-Financial-Corporation-Limited-Announces-June-30-2017-Financial-Results.html
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: no_free_lunch on November 23, 2017, 02:15:12 PM
ELF is now trading at 64% NAV.   I am not sure how good of a comp they are but Great West Life is about 150% NAV and SunLife is around 130% NAV.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: bbarberayr on November 25, 2017, 05:46:29 AM
With these smaller life insurers, you have to know that they almost always will trade at low valuations.  They have for decades and I don't see any reason that this will change.  I think ELF's business is good and will continue to do well, but you can't expect much of an upward revaluation or reversion to the mean.

The other specific unique thing about ELF is they used to also own P&C insurer Dominion and sold it to the Travelers in 2013.  I'd have to go back to their annual reports to see what % of their profitability was from Dominion vs. Empire Life, but it was quite large and that probably is a good reason for their outperformance over the life insurers as the life insurers have been hurt more by low interest rates and MFC specifically was overly aggressive prior to 2007 and paid for that over the last 10 years.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: clutch on November 25, 2017, 05:59:36 AM
With these smaller life insurers, you have to know that they almost always will trade at low valuations.  They have for decades and I don't see any reason that this will change.  I think ELF's business is good and will continue to do well, but you can't expect much of an upward revaluation or reversion to the mean.

One could argue why this should trade consistently at low valuations (in absolute terms) while all other stocks / asset categories have been inflated in the current environment. In theory, shouldn't this type of stock's valuation have been inflated as well?
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: SafetyinNumbers on November 25, 2017, 08:45:03 AM
With these smaller life insurers, you have to know that they almost always will trade at low valuations.  They have for decades and I don't see any reason that this will change.  I think ELF's business is good and will continue to do well, but you can't expect much of an upward revaluation or reversion to the mean.

One could argue why this should trade consistently at low valuations (in absolute terms) while all other stocks / asset categories have been inflated in the current environment. In theory, shouldn't this type of stock's valuation have been inflated as well?

In 2005-2006, ELF traded at a premium to NAV. It kind of ties in with your inflation argument to the extend that financial stocks were overvalued in that time frame. I still find most financial stocks to be pretty fairly valued so perhaps that's why there is no inflation its valuation.

I think the broader reason for the discount is that ETFs and more funds being indexed means that not many are looking at ELF stock as it's not in any ETF. It's also illiquid and since the financial crisis, money managers care way more about liquidity.

Also, Empire Life had an ROE below 10% for a long time and its only a recent development that the ROE has improved. An ROE above 10% argues for a P/BV north of 1 but since not many people are looking, the revaluation may take a long time. Not a problem for me as I just add more when the discount gets bigger than "normal", like it is now.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: clutch on November 25, 2017, 11:22:25 AM
The way you framed this, this one seems like a good opportunity.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: no_free_lunch on November 25, 2017, 12:15:19 PM
Thanks for the feedback all.

I am definitely not suggesting it will trade up to book any time soon.  Just pointing out that there is large margin of safety combined with excellent management track record.  These two in conjunction are hard to find these days.  I do think it will trade to book if interest rates ever move up but won't hold my breath on that.

Historically it has traded roughly 55% book to 110-120% (back in 06).  So based on this simple metric it is well on the lower bound but I suppose could always go lower.  Limited downside, substantial upside and in the meanwhile should earn you high single digits to low double digits if prior record is meaningful.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: ourkid8 on November 25, 2017, 12:32:56 PM
Is there a share repurchase plan in place?

Thanks for the feedback all.

I am definitely not suggesting it will trade up to book any time soon.  Just pointing out that there is large margin of safety combined with excellent management track record.  These two in conjunction are hard to find these days.  I do think it will trade to book if interest rates ever move up but won't hold my breath on that.

Historically it has traded roughly 55% book to 110-120% (back in 06).  So based on this simple metric it is well on the lower bound but I suppose could always go lower.  Limited downside, substantial upside and in the meanwhile should earn you high single digits to low double digits if prior record is meaningful.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: oddballstocks on November 25, 2017, 01:39:51 PM
I think this is an excellent opportunity.  I find the "It's always traded cheap" arguments flimsy.  A counter argument is if this is cheap then why aren't all other similar companies cheap as well?

I think there are a few dynamics at play:

1) The company doesn't have a website, they are 'hidden'
2) There are large insider holders
3) There is a bit of a convoluted structure with their ownership in subsidiaries and subsidiaries owning them

As to buybacks.  The parent owns funds that continually purchase shares of the parent.  This isn't the same as a buyback, but it's similar.  Along the same lines other subsidiaries have purchased shares in the parent as well.

A collection of assets that aren't impaired, and are at least run average (which ELF is) should at least trade at book.  The market is saying they are in the process of destroying shareholder value.  Yet results say otherwise.

This is the type of name I like to buy and shove in the corner of my portfolio.  Right now it seems cheap, it might in a year or four, then suddenly it'll be time to sell.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: SafetyinNumbers on November 26, 2017, 09:13:01 AM
I think this is an excellent opportunity.  I find the "It's always traded cheap" arguments flimsy.  A counter argument is if this is cheap then why aren't all other similar companies cheap as well?

I think there are a few dynamics at play:

1) The company doesn't have a website, they are 'hidden'
2) There are large insider holders
3) There is a bit of a convoluted structure with their ownership in subsidiaries and subsidiaries owning them

As to buybacks.  The parent owns funds that continually purchase shares of the parent.  This isn't the same as a buyback, but it's similar.  Along the same lines other subsidiaries have purchased shares in the parent as well.

A collection of assets that aren't impaired, and are at least run average (which ELF is) should at least trade at book.  The market is saying they are in the process of destroying shareholder value.  Yet results say otherwise.

This is the type of name I like to buy and shove in the corner of my portfolio.  Right now it seems cheap, it might in a year or four, then suddenly it'll be time to sell.

I couldn’t agree with Nate more.

I have asked Duncan about a buyback or stock split and I wouldn’t expect either to happen (at the last few AGMs). I think they like the discount as it lets the family acquire shares more cheaply. I know stock splits don’t effect value but if the stock was liquid enough after a split, it would allow market participants with liquidity constraints like Indices/ETFs to include ELF in their screens.

I also suggested they consider doing a tender offer below NAV for EVT as a way of effectively buying back stock. As an aside, EVT is a publicly traded closed end fund that is controlled by ELF that has a large position in ELF.

It’s nice to see a discussion on ELF.

Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: no_free_lunch on November 26, 2017, 09:32:52 AM
I guess the one con I can see is that the founder has handed control over to his son, Duncan.  Not sure what his track record is.  Not a show stopper for me but something I will have to keep an eye on.

Appreciate the heads up on Economic.  Hadn't read their report in detail to notice the loop.  For those interested their stake is:

Quote
At December 31, 2016, the Company’s carrying
value of its direct and indirect investment in E-L Financial of $337,414,000 (2015 - $323,007,000)
represents 41.0% (2015 – 41.2%) of Economic’s total equity investment

So they own about 10% of ELF and ELF owns 24% of them.  This should cancel out 2 or 3 percent of ELF public equity.

Do any of the other subs own ELF?
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: no_free_lunch on November 26, 2017, 09:47:47 AM
Another change I have seen is that their investment portfolio is substantially larger relative to their equity than in the past.  Maybe this is the result of selling Dominion?  At any rate, it looks like in 2007 equity investments were only 35-40% of NAV, they are now in the vicinity of 100%.  These are invested mostly in equities and quite diversified from what I can tell.  Not an issue but just something to be aware of, perhaps their results will be more volatile go forward as a result.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: Cardboard on November 27, 2017, 01:11:21 PM
"A counter argument is if this is cheap then why aren't all other similar companies cheap as well?"

While Great West trades at a premium, have a look at the discount to NAV constantly experienced by PWF and POW who own most of it. ELF is somewhat similar to PWF and POW and does suffer from a holding discount.

Cardboard
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: SafetyinNumbers on November 27, 2017, 02:46:22 PM
"A counter argument is if this is cheap then why aren't all other similar companies cheap as well?"

While Great West trades at a premium, have a look at the discount to NAV constantly experienced by PWF and POW who own most of it. ELF is somewhat similar to PWF and POW and does suffer from a holding discount.

Cardboard

While it's true that the NAV discount on PWF and POW, have averaged about 12.1% and 17.5%, respectively over the past 10 years, they also calculate that based on the premium P/B that GWO, which is the biggest component, trades at. For example, right now GWO trades at ~1.75x book value. If you adjust that to 1x, then PWF is trading at a decent premium to NAV. I'm not saying that's the right way to look at it but it makes it more comparable.

Because Empire Life is a smaller component of ELF than GWO is of PWF, perhaps the right thing to do is put a 1.75x multiple on Empire Life. This doesn't seem unreasonable as the Empire would likely sell for a premium to that if it were to be sold. This would take the ELF NAV to over $1500 and increase the NAV discount to 47%. That still seems more attractive than the PWF discount currently at about 15%. One could argue the POW discount is bigger than the ~19% discount it trades at now because it's a double discount as PWF is the biggest component but still materially smaller than the ELF discount.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: bbarberayr on November 27, 2017, 04:22:02 PM
A more appropriate compare for ELF might be Texas insures National Western Life, a small cap US insurer that is majority family owned.  The other reason I pick this is because it is easier to get long term valuation information on US stocks.

If you take a look at" https://www.gurufocus.com/chart/NWLI#&serie=,,id:pb,s:NAS:NWLI

You'll see NWLI has traded up near book value for only 3 small periods over the last 20 years - 1992/1993, 1998 and 2007, which is the same time that ELF traded above book value (and don't forget, ELF was half P&C in 2007 and P&C companies generally get higher p/b valuations than life insurers).

It seems now a lot of investors are concerned about life insurers because of low interest rates and what happened to the Japanese Life Insurers when they moved to a low interest rate environment in Japan and many of them became technically insolvent.

Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: bbarberayr on November 27, 2017, 04:26:21 PM
Regarding the Jackman family ownership, the son, Duncan, who has now taken over, is more amenable to dividends and has changed the policy of the main family holding company, Economic Value Trust (EVT-T), to now pay out all investment earnings as dividends through an additional special dividend once a year.  My opinion is he wants the cash flow more than his father did, but we will have to see what other changes he makes.  But so far, they are not indicating anything else.

The following is from the EVT Annual Report - seem fine with the discount in the market:

The Company has been a closed-end investment corporation since 1927 and has never bought back its Common Shares. The Common Shares have traded at a discount to their net asset value, ranging from a 40% discount to a 15% discount over the past 10 years. Management believes that shareholders who have invested in the Common Shares of the Company recognize that the Common Shares of the Company usually trade at a discount to their net asset value.
Closed-end investment corporations have the following benefits: they often allow investors the opportunity to purchase assets at a discounted price; they have management expense ratios which are generally much lower than those for actively-managed, open-ended funds; and the management of a closed-end investment corporation’s portfolio is not impacted by shareholder subscription or redemption activities.
Economic has no plans to become an open-ended investment fund.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: SafetyinNumbers on March 07, 2018, 06:39:05 AM
ELF reported a tremendous quarter yesterday afternoon.

NAV discount is close to 38% vs the historical closer to 33% (admittedly my discount calculation is based on quarterly numbers since 2009 and annual before that so not that scientific).

Decent upside if it just gets back to its historical discount. There is a real argument with the ROE being above 10% at Empire Life, that the discount should close significantly. The investment income alone is getting to be pretty big at ELF exclusive of Empire Life earnings.

https://www.newswire.ca/news-releases/e-l-financial-corporation-limited-announces-december-31-2017-financial-results-676023213.html
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: wisowis on May 16, 2018, 06:35:05 PM
They reported last week and net equity value was basically flat quarter over quarter ($1324 per share), shares trading at a ~39% discount.

Don't see any discussion on the quality of their equity portfolio - these are their large US equity holdings, correct? https://whalewisdom.com/filer/empire-life-investments-inc#tabholdings_tab_link
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: SafetyinNumbers on May 17, 2018, 03:07:46 AM
They reported last week and net equity value was basically flat quarter over quarter ($1324 per share), shares trading at a ~39% discount.

Don't see any discussion on the quality of their equity portfolio - these are their large US equity holdings, correct? https://whalewisdom.com/filer/empire-life-investments-inc#tabholdings_tab_link

Not necessarily as Empire Life is a subsidiary of E-L and they manage assets on behalf of clients as well. My understanding is looking at the portfolios of UNC and EVT might give a better indication of what they own at the hold co level.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: SafetyinNumbers on June 25, 2018, 05:58:45 AM
New article on Seeking Alpha

https://seekingalpha.com/article/4183685-e-l-financial-38-percent-discount-growing-book-value-potential-catalyst?app=1
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: StubbleJumper on June 25, 2018, 06:47:58 AM
New article on Seeking Alpha

https://seekingalpha.com/article/4183685-e-l-financial-38-percent-discount-growing-book-value-potential-catalyst?app=1



Not much new in the article.  In essence, you buy ELF with the notion that it'll grow BV by 7 or 8 percent, and then you hope that the valuation gap will narrow considerably to give you a very profitable exit opportunity.  If that valuation gap narrows quickly enough, life is grand!

I'm a little surprised that the Jackman family hasn't just taken this thing private.  Borrow some money, buy back the outstanding shares and be done with the minority holders.  Same with Economic and United -- offer a 15% or 20% premium, buy out the minority holders, collapse the funds and redeploy the capital.  Maybe they'll eventually do it.


SJ
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: bizaro86 on June 25, 2018, 09:24:09 AM
E-L isn't a very complicated opportunity, but seems like a pretty likely case of high single digits return plus upside optionality. Lots of market exposure though, so that's a risk.

I agree that since they definitely don't need capital,  there isn't any reason for this to be public.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: Spos on June 25, 2018, 11:36:57 AM
But what is the incentive for the Jackman family to privatize?  They are in this for the long haul and they can continue to buy shares at a big discount (and ELF can continue to buy discounted EVT and UNC shares).

Maybe if the sell Empire Life, but this reminds me of Loews, where the Tisch family's ownership of L has been increasing forever through L's buybacks.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: StubbleJumper on June 25, 2018, 05:11:38 PM
But what is the incentive for the Jackman family to privatize?  They are in this for the long haul and they can continue to buy shares at a big discount (and ELF can continue to buy discounted EVT and UNC shares).

Maybe if the sell Empire Life, but this reminds me of Loews, where the Tisch family's ownership of L has been increasing forever through L's buybacks.



Well, I would say that you are probably right.  There must not be much incentive to take ELF, Economic or United private because the Jackman family could have done it on any number of occasions, but has not chosen to do so. 

I guess my mental model would be that the Jackmans borrow ~$1B to buy the ~1m shares of ELF that they currently do not own.  ELF then borrows ~$750m to buy the 6m shares of United that it currently doesn't own.  ELF then collapses United to get full access to the company's $1.7b of assets, which it uses to repay the ~$750m loan.  Of the remaining ~$1B of assets, about $500m could then be dividended to the Jackmans to reduce the $1B that they borrowed to buy ELF (the other $500m remains in ELF to keep capital levels at a stable level).  A similar exercise could then be done with Economic, which would probable allow ELF to access another ~$100m of capital to dividend to the Jackmans, resulting in the ~$1B loan being reduced to ~$400m.  That last ~$400m could probably be repaid through an ELF dividend of excess capital.

Bing, bang, boom.  Full ownership of ELF.  No more minority holders, and much of the buyout is financed by the considerable price discount of United and Economic, while the buyout of ELF is probably done at a market premium that is still a discount to book.

But, as you said, the Jackmans seem to be very patient.


SJ
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: bizaro86 on June 25, 2018, 08:00:20 PM
From their perspective, if you know you can do something at any time, there maybe isn't a huge incentive to do it now, especially if you aren't planning on spending the money anyway. If you're just going to invest it, why not do so inside ELF as your pseudo-family-office.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: rb on June 25, 2018, 10:24:29 PM
Here's the thing that seems to be missing which may prevent the whole go private.

If they want to go private they'll have to do a tender. Why would the other shareholders tender their shares out for cheap? It makes no sense. The only way for the shareholders to do that is if they are so desperate and beaten down that they gave up any hope. My guess is if the go private doen't happen is because they don't consider that the shareholders are depressed enough so the beatings shall continue.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: SafetyinNumbers on June 26, 2018, 03:58:10 AM
so the beatings shall continue.

Have you been spending a lot of time on Twitter, rb?

It hasn’t been that bad. NAV and share price growth continue and buying at a 40% discount to NAV is a nice margin of safety which people, based on this thread and others, don’t seem to care much about these days.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: StubbleJumper on June 26, 2018, 06:03:49 AM
Here's the thing that seems to be missing which may prevent the whole go private.

If they want to go private they'll have to do a tender. Why would the other shareholders tender their shares out for cheap? It makes no sense. The only way for the shareholders to do that is if they are so desperate and beaten down that they gave up any hope. My guess is if the go private doen't happen is because they don't consider that the shareholders are depressed enough so the beatings shall continue.



Well, the quick answer is that ELF could offer a 20% or 25% premium to minority holders and still buy the shares for less than book. Same deal with Economic and United -- you could offer a 20% premium and still buy them for less than book.  It would piss off some hardcore value guys, but most would be happy to grab the 20% return and run.  You don't need everyone to agree, you just need a majority. 

That's a little bit like how Prem bought out minority ORH holders for a song.  A few of us hardcore guys are pissed, but everyone else was giddy about the premium.


SJ
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: Spos on June 26, 2018, 07:32:51 AM
"Well, the quick answer is that ELF could offer a 20% or 25% premium to minority holders and still buy the shares for less than book. Same deal with Economic and United -- you could offer a 20% premium and still buy them for less than book.  It would piss off some hardcore value guys, but most would be happy to grab the 20% return and run.  You don't need everyone to agree, you just need a majority."

I think this is it, having to pay the premium.  By doing this slowly through small purchases, you're not paying the premium.  And if your horizon is long and you have control, having the minorities doesn't seem like a large cost.  Some leakage in terms of public company costs and the small dividends, but the minorities also pay a part of your salary. 

And if this is the thinking they have no real incentive to close the discount.  I'd like to be wrong on this because I own a little of it, but I think a sale of Empire Life would be a more likely first transaction.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: bizaro86 on June 26, 2018, 07:35:19 PM
Wouldn't a tender for the CEFs at a discount put them at risk of having everyone dissent? It seems likely to me that you could make a pretty good case that your shares in a CEF are in fact worth published NAV.

I only own this at the E-L level, because I think that then the discount on the CEFs works at least partially in my favour as they are slowly buying them in. If I was picking one of the CEFs it would definitely be EVT because of the large E-L holding within the fund.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: SafetyinNumbers on June 27, 2018, 02:55:53 AM
Meanwhile, this is the largest insider purchase I have seen them make.

https://www.canadianinsider.com/company?ticker=ELF

15k shares @ 815
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: StubbleJumper on June 27, 2018, 05:23:05 AM
Meanwhile, this is the largest insider purchase I have seen them make.

https://www.canadianinsider.com/company?ticker=ELF

15k shares @ 815


Yeah, the Jackman family doesn't make many open market purchases.  If they have any aspirations to buy the ~1m shares that they currently do not own, it'll take a hell of a long time when they do it 1,000 at a time.

The more effective slow-moving takeover is when Economic periodically adds a few ELF shares and then when ELF periodically buys a few more Economic shares.  If they do that for long enough, it'll effectively be a buyout.


SJ
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: SafetyinNumbers on June 27, 2018, 06:13:11 AM
I generally see them using ELF to buy UNC and the family holding companies buy ELF and EVT.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: SafetyinNumbers on July 22, 2018, 11:31:36 AM
Australian hedge fund has a blurb on the ELF family (UNC, EVT included).

http://east72.com.au/wp-content/uploads/2018/07/E72-Quarterly-Report-June-2018.pdf
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: no_free_lunch on July 22, 2018, 12:06:08 PM
Thanks for the link.  Also a good write-up in there on VNO.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: wisowis on July 22, 2018, 01:08:44 PM
I just went over the holdings of EVT and UNC (US holdings only for now). Starting to build out a spreadsheet, for fun...

42.3% of the UNC portfolio are US holdings.
Value as of Mar 31: $738,761,000
Current: $791,851,509 (+7.2%)
= + $53,090,509
* 0.52 (ELF stake)
= + $27,607,065

24.5% of the EVT portfolio are US holdings.
Value as of Mar 31: $219,162,000
Current: $231,561,813 (+5.7%)
= + 12,399,813
* 0.24 (ELF stake)
= + $2,975,955

So $30,583,020 increase in net equity value from their US holdings since March 31st (against a net equity value of ~$5.3 billion)?

Does it make sense?
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: Rod on July 22, 2018, 02:46:44 PM
Like everyone here, I'm pretty attracted by the sizeable discounts on ELF, UNC, and EVT. I'm not happy with the layered corporate structure, however, that leads to a high capital gains tax rate. Just to use ELF as an example: Think about the UNC holding. You pay tax on the stock gains within UNC. Then you pay tax on the gain in UNC within ELF. Then you pay tax on ELF if it's in a taxable account. I kinda grudgingly accept paying capital gains taxes once if necessary, but THREE times on the same gain?? Obviously, the accumulated tax liabilities to date are netted out of NAV so you don't pay that. But you do pay all the tax on future gains. I fully expect that the Jackmans will take all three of these stocks private over time. And when they do, we can be sure that the price we get will be net of all deferred tax liabilities. If the stocks go private in the next few years it will be a good deal to buy now--the discounts are large enough to ensure that. But if it takes longer the tax drag starts to take the gain out of it. For me, buying these three stocks is a guess on how soon the privatization occurs.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: mjm on July 23, 2018, 01:19:02 PM
Companies in which The Hon. Henry N.R. Jackman has an indirect interest, control, in the aggregate, 2,909,709 or 72.4% of the outstanding Common Shares of the Company. Although The Hon. Henry N.R. Jackman is associated with some of these companies, (including Dominion and Anglo Investment Corporation Limited) he does not control any of them and, accordingly, does not have beneficial ownership of the Common Shares of the Company held by them.

EVT owns 386K shares of  ELF also which is around 10%
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: wisowis on July 24, 2018, 05:26:46 PM
I managed to enter in all the information from United and Economic's March 31st reports, and combined them with their stake in Algoma.
This accounts for 1.324 billion of the 5.323 billion net equity value listed in ELF's report.

Since March 31, 2018:
Algoma +6,220,210$
United +43,851,375$
Economic +4,539,748$

Shares outstanding: 4,019,667

Per share, these pieces of ELF went from $329.3 to $342.9 (+4.1%), or a per share increase of 13.6$.


...are there any other pieces available?
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: SafetyinNumbers on July 24, 2018, 06:49:56 PM
Are you trying to calculate the change in book value quarter over quarter?
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: wisowis on July 24, 2018, 07:39:39 PM
Current value vs. last quarter. You can check my spreadsheet here if you are interested: https://docs.google.com/spreadsheets/d/1F1Pk-vQKZVXX4X2UESABcpliKFGdki0Ip5NQCOxiTaY/edit?usp=sharing
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: SafetyinNumbers on July 25, 2018, 03:32:44 AM
I was just curious. I would throw in at least a 10% ROE for Empire Life for the quarter and add that in.

Also, they consolidate UNC and I believe, equity account for Algoma and EVT so the changes in market value don’t necessarily get captured in the book value.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: SafetyinNumbers on August 02, 2018, 04:30:34 PM
Empire Life puts up a 15.6% ROE for Q2. Another very strong indication that the NAV is understated when valuing Empire Life at book value.

http://globenewswire.com/news-release/2018/08/02/1546584/0/en/Empire-Life-reports-second-quarter-2018-results.html?ev=1

I also find it interesting that Empire Life appears to have started paying out regular dividends to ELF.

http://globenewswire.com/news-release/2018/08/02/1546588/0/en/Empire-Life-announces-dividends.html?ev=1
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: mjm on August 11, 2018, 02:16:14 PM
2nd quarter results out. any input from the knowledgeable posters here? Empire life results seem to keep improving which is encouraging.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: Grafter on November 21, 2018, 08:37:04 PM
3rd quarter is out.  It looks like the discount to NAV is about 39% (if I'm calculating it right).
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: woodstove on December 10, 2018, 07:59:58 AM
United Corps has changed investment manager (per recent press release).  Any thoughts?  Does it reflect a strategy change, or just a transition of teams?
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: notorious546 on December 13, 2018, 02:00:03 PM
United Corps has changed investment manager (per recent press release).  Any thoughts?  Does it reflect a strategy change, or just a transition of teams?

how why/ does this matter?
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: woodstove on December 14, 2018, 01:22:33 PM
Hi Notorious...  I'm not sure I understand your question.  Here is what I was getting at...

-- Do you mean what is difference between strategy change vs transition of teams?  I am curious whether there is strategy change -- eg, with another ELF affiliated fund, a while-ago decision to allocate a small fraction of funds to emerging markets represented a small strategy change, I thought.

-- In contrast, a transition of teams is perhaps not a strategy change, just possibly a determination that another team(s) might be more suited to continue following of prior strategy.   Don't know ... that's why I am interested in thoughts of others.

Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: SafetyinNumbers on December 14, 2018, 03:44:54 PM
They seem to have a preference for independent money managers so perhaps it has more to do with J&F being acquired by Scotia than a strategy change per se.

As a side note, this is the biggest NAV discount I have seen since 2011. I don’t track it daily but by quarter end back to 2009 and yearly before that. At the end of 2011, the NAV was $642.98 and the stock was $340.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: mjm on December 15, 2018, 04:15:40 AM
i FWIW also believe they are more stable w/o the property and casualty business they owned then and sold and with just Empire which is more stable and growing, albeit slowly.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: woodstove on December 15, 2018, 07:29:35 AM
"Preference for independent money managers" -- yes, that seems most probable reasoning.  I admit being a bit concerned about J&F acquisition by Scotia, that the rationality, value, loyalty, patience discipline might get diluted via larger organization culture.  So despite knowing nothing about these new investment managers, I'm ok with such a move.  One of the curiosities about ELF group is that the boards have max age-70 criterion, despite being such long-history firm.  Wise choice in my opinion (and I'm over that hill, among others).  Rely upon seasoned middle generation, facilitate the seasoning and intake.  Re stability -- the group has more cross bracing than most structures.  Very impressive.  Good for worry-free sleep.  Glad to be along for the ride, hope the group never goes private.  Thanks for the link to Australian fund manager writeup -- hadn't seen it before.  Maybe discount is Christmas special !
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: mjm on March 09, 2019, 06:50:31 AM
look like corporate's global portfolio got caught in the 4th quarter swoon.  looks like empire had a so-so year. any other more knowledgeable posters have any input.  TIA
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: wisowis on March 10, 2019, 12:59:23 PM
From my crappy spreadsheeting skills, looks like these are the top drags on ELF from the Mar 2018 carrying value to current market price:

- United's Japan portfolio: -4.3$/share
- Conagra Brands [via United]: -2.7$/share
- Henkel [via Economic]: -3$/share
- Algoma: -3.2$/share (might be wrong about this one, based on SafetyInNumber's previous comment).
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: SafetyinNumbers on May 03, 2019, 12:27:05 PM
Empire Life released its earnings - ROE was decent at 11.2%

http://www.globenewswire.com/news-release/2019/05/02/1815605/0/en/Empire-Life-reports-first-quarter-2019-results.html?ev=1

With the market bounce back, I’m expecting NAV to bounce to new highs when they report next week but I guess we’ll see.

Anyone going to the AGM?
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: SafetyinNumbers on May 11, 2019, 08:12:35 PM
ELF reported on Thursday. The NAV hit an all new high at $1382.18 while the NAV discount is the biggest since 2011.

I attended the AGM on Thursday as well. A few shareholders asked about the potential for share buybacks and the push back from management seemed slightly less than the yeas before.

I don't know if they will try something to close the discount or buy the stock back but I wouldn't be surprised if they did. I also don't have high hopes that they will!

https://www.newswire.ca/news-releases/e-l-financial-corporation-limited-announces-march-31-2019-financial-results-818983409.html
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: wisowis on May 11, 2019, 09:02:50 PM
What reasoning did they provide to not do a buyback? Seems like a no-brainer to buy dollars for 57 cents.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: wachtwoord on May 12, 2019, 04:12:51 AM
What reasoning did they provide to not do a buyback? Seems like a no-brainer to buy dollars for 57 cents.

Empire building? Wanting to privately buy cheap shares?

What else would be a good reason really? I really doubt they have alternative investment opportunities with a higher ROIC :P
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: SafetyinNumbers on May 12, 2019, 06:35:58 AM
What reasoning did they provide to not do a buyback? Seems like a no-brainer to buy dollars for 57 cents.

Empire building? Wanting to privately buy cheap shares?

What else would be a good reason really? I really doubt they have alternative investment opportunities with a higher ROIC :P

I think they think it’s akin to financial engineering. They tried a SIB at ALC and barely bought any stock back so they don’t think “it worked”. Now they are doing a special dividend at ALC.

Mostly it seems they think value investing is out of favour and when it comes back in favour the discount will shrink on its own. To me that just seems like an opportunity lost.

I suggested they buy as much EVT they can at par. It would increase their ownership of the ELF shares held there and would be a quasi buyback without impacting ELF shares and then do a SIB on ELF shares.

Another shareholder suggested a normal course issuer bid and a phone number shareholders could call if they want to sell a certain amount of stock. They would have a weekly block exemption.

Another shareholder wants all the dividends passed through. ELF started taking big dividends from Empire Life last year and his argument was the dividends not paid out are only worth 57 cents on the dollar because of the NAV discount.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: mjm on May 14, 2019, 07:30:13 AM
have they been buying any more ELF in the investment funds UNC or EVT, of which they are slowly accumulating I believe?
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: SafetyinNumbers on May 14, 2019, 11:56:57 AM
have they been buying any more ELF in the investment funds UNC or EVT, of which they are slowly accumulating I believe?

No, they haven't really used those to accumulate ELF recently. I don't think UNC has ever owned any.

EVT does own ~9.5% of ELF but they haven't added any since 2012, as far as I can tell.

ELF does slowly buy shares of UNC but that has slowed to almost nothing lately.

Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: mjm on May 14, 2019, 12:16:55 PM
reminds me of nwli of which i own some. 

I believe i remember ( think anyway as mind may be going) and I tried to google but could not find that Jackson at one point( think in early '90's) bought out an investment company I believe in canada that I believe he owned quite a few shares of.
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: SafetyinNumbers on May 15, 2019, 08:44:21 AM
Duncan bought 100 shares yesterday so that’s something 🤪

https://www.canadianinsider.com/node/7?menu_tickersearch=ELF+%7C+E-L+Financial
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: SafetyinNumbers on May 27, 2019, 08:12:30 PM
ELF has a website now.

It's not very useful but at least it exists.

https://www.e-lfinancial.ca/general-information
Title: Re: ELF.TO - E-L Financial Corp. Ltd.
Post by: woodstove on May 28, 2019, 02:35:20 AM
Thanks for the pointer to website.  Some good info there including annual reports for past decade.  Info previously available but helpful to have it all gathered together.