Author Topic: ELF.TO - E-L Financial Corp. Ltd.  (Read 68175 times)

SafetyinNumbers

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Re: ELF.TO - E-L Financial Corp. Ltd.
« Reply #60 on: May 22, 2017, 02:42:12 AM »


no_free_lunch

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Re: ELF.TO - E-L Financial Corp. Ltd.
« Reply #61 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
Its 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-Ls collection of corporate investments is trading at about 50 or 60 cents on the dollar.

EliG

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Re: ELF.TO - E-L Financial Corp. Ltd.
« Reply #62 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". ::)

no_free_lunch

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Re: ELF.TO - E-L Financial Corp. Ltd.
« Reply #63 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.
« Last Edit: May 22, 2017, 02:48:29 PM by no_free_lunch »

SafetyinNumbers

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Re: ELF.TO - E-L Financial Corp. Ltd.
« Reply #64 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

no_free_lunch

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Re: ELF.TO - E-L Financial Corp. Ltd.
« Reply #65 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.

bbarberayr

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Re: ELF.TO - E-L Financial Corp. Ltd.
« Reply #66 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.

clutch

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Re: ELF.TO - E-L Financial Corp. Ltd.
« Reply #67 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?

SafetyinNumbers

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Re: ELF.TO - E-L Financial Corp. Ltd.
« Reply #68 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.

clutch

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Re: ELF.TO - E-L Financial Corp. Ltd.
« Reply #69 on: November 25, 2017, 11:22:25 AM »
The way you framed this, this one seems like a good opportunity.