Author Topic: ELF.TO - E-L Financial Corp. Ltd.  (Read 68086 times)

wisowis

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Re: ELF.TO - E-L Financial Corp. Ltd.
« Reply #190 on: April 07, 2020, 08:16:11 PM »
I had another question (that I asked in the Knight thread as well, but didn't get an answer). As mentioned above, they repurchased 140k shares since the NCIB started on March 9, 2020. Their NCIB says they may "purchase up to 1,000 Shares on the Exchange during any trading day." Obviously they've bought well in excess of that. Are the NCIB limits not binding?


JPerez

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Re: ELF.TO - E-L Financial Corp. Ltd.
« Reply #191 on: April 07, 2020, 11:57:17 PM »
Thanks Safety
Total mortality in Spain has double for March compare with last year and it has nearly triple for the last.2 weeks of march.
Now you are right the worst affected age cohort Vs expectations was 65 to 75 followed by over 75s.
This is during the worst of the epidemic and will go down over the next few weeks.
But your point stands that life insurers are affected more by mortalities in the younger cohort

SafetyinNumbers

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Re: ELF.TO - E-L Financial Corp. Ltd.
« Reply #192 on: April 08, 2020, 03:21:54 AM »
I had another question (that I asked in the Knight thread as well, but didn't get an answer). As mentioned above, they repurchased 140k shares since the NCIB started on March 9, 2020. Their NCIB says they may "purchase up to 1,000 Shares on the Exchange during any trading day." Obviously they've bought well in excess of that. Are the NCIB limits not binding?

Under the NCIB rules, a company is allowed one block trade a week that is above the daily limit. They used the block trade option 3x last month.


StubbleJumper

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Re: ELF.TO - E-L Financial Corp. Ltd.
« Reply #194 on: April 08, 2020, 07:18:48 AM »
UNC and EVT also bought some stock back

https://www.canadianinsider.com/company-insider-filings?ticker=UNC

https://www.canadianinsider.com/company-insider-filings?ticker=EVT



Any way of seeing whether United or Economic grabbed a few more ELF shares during this decline? 


SJ

SafetyinNumbers

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Re: ELF.TO - E-L Financial Corp. Ltd.
« Reply #195 on: April 08, 2020, 11:34:35 AM »
UNC and EVT also bought some stock back

https://www.canadianinsider.com/company-insider-filings?ticker=UNC

https://www.canadianinsider.com/company-insider-filings?ticker=EVT

It would show up on the link to ELF posted previously. They have to file within 5 days so it would have shown up if they did.

I think the more interesting thing is if the family hold cos that get the special dividend use it to buy more stock too and shrink the float even more.

Any way of seeing whether United or Economic grabbed a few more ELF shares during this decline? 


SJ

SafetyinNumbers

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Re: ELF.TO - E-L Financial Corp. Ltd.
« Reply #196 on: May 07, 2020, 08:09:47 AM »
I have modeled NAV per share as per the end of Q1 (see attachment)
I get a NAV per share of 1308 CAD at the end of Q1 that would be a decline of 12% YTD (10% excluding the dividend).
The numbers are based on the sensibilities provided in the Annual report.
They provide sensibilities to 20% declines in equity markets for the Life insurer and the E-L corporate, interest rates sensibility for the Empire life, currency sensibility to USD and  sensibility to fair value change in associates (Algoma and economic)
Empire life has a big corporate bond book as you would expect although quality seems to be quite high (only 15% are BBB or lower), despite this the bond prices would have deteriorated and the increase in the value of the bonds due to the decrease in interest rates is most likely overstated in the model.
This book value changes are all based on expected balance sheet changes and do not take into account the P&L for empire life for the quarter as I have no idea what this would be.
I see in their annual report that they have increased retention of the individual life policies, using less reinsurance (not great timing on this to say the least).
They guide to a loss of aprox. 12 million CAD for every 2% increase in mortality.
I don't know what their insurance contracts look like and if they have some kind of pandemic protection, if any of you have any idea on this and can comment would be great.
I assume that the 2% is a long term increase not a spike and i don't think that it would be material to this quarter in any case.
It looks like the shares are selling at a 48% of NAV. This would be the widest it has been as far back as I have looked.
Any feedback would be great.

Bang on analysis!

https://www.newswire.ca/news-releases/e-l-financial-corporation-limited-announces-march-31-2020-financial-results-817480841.html

SafetyinNumbers

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Re: ELF.TO - E-L Financial Corp. Ltd.
« Reply #197 on: June 05, 2020, 05:50:22 AM »
ELF bought all 200,970 shares allowed under the NCIB plus the family hold co (which ELF indirectly owns a piece) bought another 17k+ shares.


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

Itís only 5% of shares outstanding but itís also 20% of the float. It might matter at some point.

JPerez

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Re: ELF.TO - E-L Financial Corp. Ltd.
« Reply #198 on: June 06, 2020, 08:56:01 AM »
My estimation of book value as per the close yesterday is at 1486 CAD per share after all the buybacks.
That is the same as it was at year end and that is after the 26.5 CAD per share dividend it distributed at the end of March.
It is now at close to a 55% discount to NAV.
I watched the Shareholders meeting online, it was the first time I have watched Duncan Jackman speaking and my impressions were good in general as he seems to be a good CEO and the team around him seems quite competent as well, on the other hand I had the impression that they do not care much about minority shareholders.
It isn't so much about what Mr. Jackman said as his tone. Somebody commented about having 100% of their assets in ELF and he was adamant that nobody should have 100 % of their wealth in any one company including ELF. Also somebody thanked them for the stewardship of the company through the years and It seemed to me that he was a bit uncomfortable with the praise.
This is only my subjective impression reading the tone and the body language.
While it is, of course, very good advise not to keep all your wealth in any one company ELF is very similar to a diversified close end equity fund with a modest amount of leverage so it is not as risky as investing in the equity of a company operating in one sector of the economy.
They have completed their 5% buyback in less than 3 months and it was nearly all of it in blocks so they almost didn't buy anything in the open market.
It seeems like there were quite a few institutional investors keen to get out at nearly any price due to the widening NAV discount over the years and the lack of liquidity in the shares.
To me it looks like the Jackmans are delighted with the discount and they would pay as little as they can for the rest of the float. This is of course normal to a certain extend but in some other companies minority shareholders are treated more like partners while here they are just the patsy that holds the remaining chips on the table.
The company at this point is more a family office than a public company.
I wonder what are the incentives of Jackmans to keep this company public.
To me the most likely scenario is if the discount remains attractive, the Jackmans (through buy backs and direct purchases) will aim to control 90- 95% of the company (currently they own around 80%) and at that point they will try to take it private. Probably not offering even NAV at that point.
So in my most likely scenario the return would still very attractive in the next 3-5 years if this plays out.
Any thoughts on this?
Full disclosure: I don't own any ELF shares anymore, I had bought them during the March panic and I sold them just after the shareholder meeting for the reasons I exposed here and I moved the capital to BRK shares  because I was impressed with Buffett's comments and presentation at the Berkshire meeting and i thought the negativity in BRK was really overdone after the meeting

SafetyinNumbers

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Re: ELF.TO - E-L Financial Corp. Ltd.
« Reply #199 on: June 07, 2020, 03:07:42 PM »
My estimation of book value as per the close yesterday is at 1486 CAD per share after all the buybacks.
That is the same as it was at year end and that is after the 26.5 CAD per share dividend it distributed at the end of March.
It is now at close to a 55% discount to NAV.
I watched the Shareholders meeting online, it was the first time I have watched Duncan Jackman speaking and my impressions were good in general as he seems to be a good CEO and the team around him seems quite competent as well, on the other hand I had the impression that they do not care much about minority shareholders.
It isn't so much about what Mr. Jackman said as his tone. Somebody commented about having 100% of their assets in ELF and he was adamant that nobody should have 100 % of their wealth in any one company including ELF. Also somebody thanked them for the stewardship of the company through the years and It seemed to me that he was a bit uncomfortable with the praise.
This is only my subjective impression reading the tone and the body language.
While it is, of course, very good advise not to keep all your wealth in any one company ELF is very similar to a diversified close end equity fund with a modest amount of leverage so it is not as risky as investing in the equity of a company operating in one sector of the economy.
They have completed their 5% buyback in less than 3 months and it was nearly all of it in blocks so they almost didn't buy anything in the open market.
It seeems like there were quite a few institutional investors keen to get out at nearly any price due to the widening NAV discount over the years and the lack of liquidity in the shares.
To me it looks like the Jackmans are delighted with the discount and they would pay as little as they can for the rest of the float. This is of course normal to a certain extend but in some other companies minority shareholders are treated more like partners while here they are just the patsy that holds the remaining chips on the table.
The company at this point is more a family office than a public company.
I wonder what are the incentives of Jackmans to keep this company public.
To me the most likely scenario is if the discount remains attractive, the Jackmans (through buy backs and direct purchases) will aim to control 90- 95% of the company (currently they own around 80%) and at that point they will try to take it private. Probably not offering even NAV at that point.
So in my most likely scenario the return would still very attractive in the next 3-5 years if this plays out.
Any thoughts on this?
Full disclosure: I don't own any ELF shares anymore, I had bought them during the March panic and I sold them just after the shareholder meeting for the reasons I exposed here and I moved the capital to BRK shares  because I was impressed with Buffett's comments and presentation at the Berkshire meeting and i thought the negativity in BRK was really overdone after the meeting

I wouldn't necessarily assume institutions selling is some sort of rebuke on ELF's strategy. The fact is that a lot of shareholders needed liquidity at that time due to redemptions or to buy something else they owned that was going down faster. Those shareholders might be back and the float is now 20% smaller.