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JimVanMeerten (62.66)

As the Economy Recovers Zenith May Reach Peaks - ZNT

Recs

2

September 08, 2009 – Comments (3) | RELATED TICKERS: ZNT.DL

Zenith National Insurance Corp. - ZNT is a pure recovery play. The stock is depressed for 2 reasons: 1- As payrolls in the manufacturing sector contracted so did the underlining payroll insurance premiums and 2 - like all insurance companies they make money investing on the time spread between the time they collect premiums and the time they pay benefits.

When the economy recovers, the investment portfolios should increase in value and when new workers are hired premiums should increase.

There has been recent price action to the upside and BarChart has BUY signals on 12 of its 13 technical indicators. New high have been hit in 7 of the last 20 trading sessions including 4 of the last 5 trading sessions,

I call a BUY with a stop loss at 25.43

 

Jim Van Meerten share more investment opinions on his blog Financial Tides

3 Comments – Post Your Own

#1) On September 08, 2009 at 11:58 PM, cdulan (91.25) wrote:

You are nuts.  Workers Comp companies are dependent on employment.  At least 60% of ZNT business is in California which has the quickest accellerating unemployment in the nation excluding Michigan.  I might even think you are a short seller trying to pump the stock.

 ZNT has great management and a solid market niche.  But with unemployment a lagging indicator of the overall economy and the California economy no where near the bottom, the State of California all but bankrupt, and house prices still falling, you are a little early my friend.

 "The economy just fell off a 20 story cliff and we are at the 5th floor.  Every thing is ok, but it is a little early to say it's over" unknown

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#2) On September 09, 2009 at 10:20 AM, JimVanMeerten (62.66) wrote:

Cdulan - That's my point exactly.  The stock is depressed because of the high unemployment rate and past poor portfolio return. As people get back to work and the portfolio returns improve the P/E ration on the stock should give the play some leverage.  Plus the stop loss protects on the down side.

 

Financial Tides

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#3) On September 09, 2009 at 10:55 AM, checklist34 (99.71) wrote:

might be a nice call, jim...  i'd look clsoer but i have more insurance companies already than it reasonable, lol

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