Corner of Berkshire & Fairfax Message Board

General Category => Investment Ideas => Topic started by: muscleman on November 08, 2019, 07:47:32 AM

Title: ESNT - Essent Group
Post by: muscleman on November 08, 2019, 07:47:32 AM
I am surprised no one mentioned it here.
Really strong EPS growth in the past five years. ($1 in 2014 to $5 now). 10x P/E, 2x P/B.  :)

Disclosure: I am long from a momo trader perspective, and I am really surprised that this is a value stock too.
Title: Re: ESNT - Essent Group
Post by: cameronfen on November 08, 2019, 12:12:16 PM
I don't know anything about it but fast growing insurers earning high returns on capital with no known competitive advantage usually means (very) lax underwriting standards. 
Title: Re: ESNT - Essent Group
Post by: RichardGibbons on November 08, 2019, 12:43:49 PM
I've owned it since about $20 and I'll probably lighten my position as a new tax year rolls around.  I think they were prospering partly as a result of the 2008 carnage, but I think any advantages they got as a result of that have pretty well faded now and they're a lot bigger than they were 5 years ago. So, I imagine their growth rate will fall, though I've been pleasantly surprised at how they've been doing.

I'm not eager to hold them through a recession basically because of Cameronfen's reasoning.  These guys have never actually been tested by a recession, and as an outsider, it's pretty hard to know how well they'll hold up, so a degree of skepticism is warranted.