Saturday 26 July 2014

Analysis of Catlin

Catlin, a Bermuda/UK insurance company

Company: Catlin Group

ISIN BMG196F11004 | WKN A0B93K

Business: A Bermuda / UK insurance company. The are dealing with niche insurance and reinsurance and have three primary functions: Underwriting Insurance & Reinsurance, Investing Assets and the third one is Managing & Paying Claims (so what they try to avoid as much as possible).

Active: They have six regional hubs: Asia Pacific, Bermuda, Canada, Europe, London/UK and the US.

P/E: 8.8

Contrarian values of P/E, P/B, ROE as well as dividend for Catlin

The P/E of Catlin is excellent with 8.8 and the P/B is also great with 0.9 which gives us a very clear buy from Graham. The earnings to sales are at 10% which is good but the ROE could have been better since it is at only 10.4%. The book to debt ratio is also fairly high but better than many insurance companies with 0.4.
In the last four years they have had a yearly growth rate of 4.4% which is very good and this then also gives us a motivated P/E of 15 to 18 which means Catlin is undervalued by the market today.
They pay a nice dividend of 3.4% which on the other hand only represents 30% of their earnings so they should be able to keep it running!

Conclusion: Graham says yes to this company and I do not know because I simply do not like that a company is having their headquarter on Bermuda. Still the P/E, P/B and dividends are all great and only the ROE is less good.

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