Alleghany(NYSE:Y)

[Guest misterstockwell]

I like to see the discussion about Loews and CNA, so I thought I would throw another relatively unknown insurer out there for discussion. Alleghany Corp. is timely in that they still hold a million shares of BNI. I bought Y when it had well over $200 in liquid assets and was trading at 170 or so. At that time, they essentially were a shell. Weston Hicks came in(he was CFO of Chubb previously) as CEO, promptly put his money where his mouth was(bought a couple million dollars of stock), and started acquiring insurance companies. It had a good run, spun out Darwin, rode a large stake in BNI, but also stumbled with the good ole workmens comp in California(when will people realize that that business sucks donkey dick and will always bite you in the ass?). Anyway, as it stands now, it is well under book, has a large stock portfolio overweight energy, and some fair to middling insurance businesses. Like Fairfax, this quarter's report should show some serious gain in book value. It should be over 300. Anyone else know the company?

[Guest misterstockwell]

http://www.sec.gov/Archives/edgar/data/775368/000095012309033793/y78763ae13fvhr.txt

 

Thats the 6/30 holdings. They are worth about $750 million as of this morning. Large muni holdings in the portfolio as well.

[Guest kawikaho]

Yeah, I used to own Y for awhile.  When I read their filings, I realized the only holding they had was BNI.  I then promptly sold them.  I thought these guys would have been better value investors like FFH, but they just took one big move into BNI.

 

Actually, much thanks for bringing this up.  I almost totally forgot about Y, and it's probably a very good proxy into Berkshire's buyout of BNI.  I agree, this should move book.  By how much?  I dunno.  I gotta do some research later this afternoon.

[Rabbitisrich]

Kawikaho, do you mean that you only liked the BNI investment? Y has most of their holdings, in dollar terms, in energy companies.

[Guest misterstockwell]

Years ago, they had sold all their operating companies and essentially had BNI stock and cash. I think that is what he is referring to.

[Guest kawikaho]

No, at the time, they only held BNI.  That was their only investment.  It looks like they switched up their investment float.  Oh well... I thought Y would have made a good proxy into the buyout.  Shucks.

[Partner24]

I've followed Alleghany over the years, but never bought some shares because I preferred other holding companies. I didn't like their MBS investments and called the IR department about that. The guy took time to speak with me and I did get some answers, but was not satisfied by them, so I preferred to stay with FFH and others only.

 

Cheers!

[Guest Bronco]

Partner24 - care to expand on what insurance companies you like better?

 

Myself - I own CNA and Loews, Aspen Holdings, and FFH.  But I am always looking for good ideas.

 

 

[BargainValueHunter]

A great write-up on Alleghany:

 

http://online.barrons.com/article/SB50001424052748704727004577054382059668916.html?mod=googlenews_wsj?mod=googlenews_barrons

 

The deal probably ends a tumultuous few months for Transatlantic, during which it received three takeover offers—from Allied World Assurance, Validus and Berkshire—before accepting Alleghany's bid. It also raises the profile of Alleghany, long run like a private company.

 

Alleghany communicates little with investors, eschewing earnings conference calls and investor meetings, and has very little analyst coverage. Its stock is thinly traded, owing to a high absolute price—the company dislikes stock splits—and the presence of several longtime holders, including the Kirby family, which has an estimated 30% stake.

 

Alleghany, like Berkshire, emphasizes growth in book value per share. This has risen at an 8.8% annual clip since 2000, beating that of its benchmark, the Standard & Poor's 500, which has slid by 0.8% a year in that span. Also like Berkshire, Alleghany has used insurance profits to make equity investments. It had a $1.4 billion portfolio on Sept. 30 with ExxonMobil (XOM) the dominant holding. Hicks, 54 years old, oversees equity investments, and since he became CEO in 2004, Alleghany's portfolio has returned 159%, nearly five times the S&P's 32%.