Author Topic: ELF.TO - E-L Financial Corp. Ltd.  (Read 50027 times)

StubbleJumper

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Re: ELF.TO - E-L Financial Corp. Ltd.
« Reply #20 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

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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.


StubbleJumper

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Re: ELF.TO - E-L Financial Corp. Ltd.
« Reply #21 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

NormR

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Re: ELF.TO - E-L Financial Corp. Ltd.
« Reply #22 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.

StubbleJumper

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Re: ELF.TO - E-L Financial Corp. Ltd.
« Reply #23 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....

benhacker

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Re: ELF.TO - E-L Financial Corp. Ltd.
« Reply #24 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
Ben Hacker
Beaverton, Oregon - USA

StubbleJumper

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Re: ELF.TO - E-L Financial Corp. Ltd.
« Reply #25 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!

Aberhound

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Re: ELF.TO - E-L Financial Corp. Ltd.
« Reply #26 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.

no_free_lunch

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Re: ELF.TO - E-L Financial Corp. Ltd.
« Reply #27 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?

notorious546

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Re: ELF.TO - E-L Financial Corp. Ltd.
« Reply #28 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?

bbarberayr

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Re: ELF.TO - E-L Financial Corp. Ltd.
« Reply #29 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.