Value Investing

Opportunities in Life Insurance Stocks–From The Great Shelby Davis

by csinvesting

And what I’m interested in is investing in people.– Arthur Rock

As a bull market continues, almost anything you buy goes up. It makes you feel that investing in stocks is a very easy and safe and that you’re a financial genius. –Ron Chernow

We discussed the relatively unknown, great investor, Shelby Davis, who compounded his capital by over 23% for 47 years in the insurance sector here:http://wp.me/p1PgpH-zM. I was able to dig out one of his research reports from Jastor (A scholarly Research Database). This 1957 report is worth reading because it shows you how a great investing mind thinks about an industry. Also, Mr. Davis goes back 30 to 50 years in his research–showing you his respect for understanding the history of the industry. Lessons for today.

OPPORTUNITIES IN LIFE INSURANCE STOCKS BY SHELBY CULLOM DAVIS

The present (August 1957) opportunity in life insurance stocks stems from three factors: (1) They are desirable long-term growth investments. (2) They are attractively priced at 10-12 times estimated 1956 adjusted earnings. (3) They have undergone a price correction for 18 months which has carried many issues as much as 30% to 40% below their highs. Yet earnings this year will be at an all-time high and the fundamentals on which earnings rest  (sales, improved mortality, high interest rates) appear favorable for the foreseeable future. The present opportunity exists largely because of market congestion.

The research report is here:https://rcpt.yousendit.com/1422135444/8aea00fbe09e0b2b58586a585283b49a  And this will be in the Value Vault Investor folder under Davis.

Via: csinvesting

Author: csinvestingIn my peripatetic life I have been a ruby smuggler, commodity trader, securities analyst, investment banker, and entrepreneur. Each role taught me more about value investing. - John Chew - The Editor