Corona sensitive investments

[rukawa]

A few of them have threads in this forum, coincidence?

 

Yes. Only ones that weren't from the screen are the cruise lines.

 

Hawaiian Holdings which i bumped on its thread looks very cheap.

 

[samwise]

... Investments I was looking at were NSP and BBSI. low PE, high ROE, decent growth prospects, but short term hit from COVID, hopefully not fatal to these companies. These companies basically handle HR, payroll, and benefits for small employers. Part of the profit is insurance. Both seem to offer workers comp themselves , and NSP seems to have some profit/loss impacts from health insurance. There is a cost from the shutdown's reduced employment, usual for these companies in any economic slowdown, but also a possible loss from the insurance side.

Thats what made me wonder about the cost of treatment, who covers it etc. The US is pretty litigious, and the healthcare costs were already a high percentage of GDP. Not sure what impacts the current costs will have on health insurance providers, and ultimately on the costs of renewing/getting insurance. Good point that all other health costs may go down, so the net effect could be small or even positive.

Also not sure how liable employers are if employees get infected at work. Like those meat plants that have shut. Can the employers be sued for not providing enough safety at work? Since the infection will probably form a cluster, frequency of claims can be high. A few deaths, and the exposure can be every large.

The companies you mention are in an area i understand well. Will take a look and maybe start or participate in a separate thread?

For the employers' liability side, the potential cost is still unknown and, using an insurance-like frame of mind, this is very difficult to price at this point. Jurisdictions (see example below) are now publishing (evolving) guidelines and law firms (smelling opportunities) publish their own versions on how to deal with this. If interested, listed below is a reference coming from Corvel (a company i know very well) that offers a webcast next week.

https://www.cdc.gov/coronavirus/2019-ncov/community/guidance-business-response.html

https://www.corvel.com/covid-19

 

 

CB, we can continue here. The Coronavirus thread is hard to navigate through the parochial US issues.

 

California has this, which is BBSI’s big market.

https://www.fresnobee.com/news/coronavirus/article242213436.html

 

Oklahoma https://oklahoman.com/article/5660908/injured-workers-test-how-workers-comp-handles-covid-19

 

https://www.wcb.mb.ca/how-the-wcb-is-responding-to-covid-19

https://www.businessinsurance.com/article/20190801/NEWS08/912329903/Infectious-disease-risks-stump-employers#

 

Seems people with occupational exposure are covered, basically healthcare workers. All others may be covered, but it isn’t clear.

[Cigarbutt]

... Investments I was looking at were NSP and BBSI. low PE, high ROE, decent growth prospects, but short term hit from COVID, hopefully not fatal to these companies. These companies basically handle HR, payroll, and benefits for small employers. Part of the profit is insurance. Both seem to offer workers comp themselves , and NSP seems to have some profit/loss impacts from health insurance. There is a cost from the shutdown's reduced employment, usual for these companies in any economic slowdown, but also a possible loss from the insurance side.

Thats what made me wonder about the cost of treatment, who covers it etc. The US is pretty litigious, and the healthcare costs were already a high percentage of GDP. Not sure what impacts the current costs will have on health insurance providers, and ultimately on the costs of renewing/getting insurance. Good point that all other health costs may go down, so the net effect could be small or even positive.

Also not sure how liable employers are if employees get infected at work. Like those meat plants that have shut. Can the employers be sued for not providing enough safety at work? Since the infection will probably form a cluster, frequency of claims can be high. A few deaths, and the exposure can be every large.

The companies you mention are in an area i understand well. Will take a look and maybe start or participate in a separate thread?

For the employers' liability side, the potential cost is still unknown and, using an insurance-like frame of mind, this is very difficult to price at this point. Jurisdictions (see example below) are now publishing (evolving) guidelines and law firms (smelling opportunities) publish their own versions on how to deal with this. If interested, listed below is a reference coming from Corvel (a company i know very well) that offers a webcast next week.

https://www.cdc.gov/coronavirus/2019-ncov/community/guidance-business-response.html

https://www.corvel.com/covid-19

CB, we can continue here. The Coronavirus thread is hard to navigate through the parochial US issues.

California has this, which is BBSI’s big market.

https://www.fresnobee.com/news/coronavirus/article242213436.html

Oklahoma https://oklahoman.com/article/5660908/injured-workers-test-how-workers-comp-handles-covid-19

https://www.wcb.mb.ca/how-the-wcb-is-responding-to-covid-19

https://www.businessinsurance.com/article/20190801/NEWS08/912329903/Infectious-disease-risks-stump-employers#

Seems people with occupational exposure are covered, basically healthcare workers. All others may be covered, but it isn’t clear.

The potential shift in burden of proof (work versus personal exposure) is potentially ominous for private players as it would make the liability environment unclear and only suitable for underwriting by public entities (bailout mentality).

Will look into NSP, BBSI and others within the next few weeks.

 

On a related note, it looks like health insurers may 'benefit' in the short term due to shifting costs:

https://www.reuters.com/article/us-health-coronavirus-usa-healthinsuranc/us-health-insurers-benefit-as-elective-care-cuts-offset-coronavirus-costs-idUSKCN2291DY

In the past, players like Centene, 'learned' to make money when more costs were transferred to the government's lap and there may be a short term opportunity here.

[Gregmal]

As a real estate junky, ESRT looks like its got a lot of free call options at this valuation. Tremendously positioned on the balance sheet side of things as well. No major maturities for a while either.

[Liberty]

http://yetanothervalueblog.com/2020/04/yet-another-guide-to-media-stocks-part-5a-corona-impacts.html