Through its operating subsidiary Montpelier Reinsurance Ltd. is a provider of global property and casualty reinsurance and insurance products.
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Crushed over the past year by Hurricane Katrina, a disaster, you will recall, that was not so much abou the hurricane itself (though that was bad), but the levees that gave way, which was much worse. I truly think worries of similar hurricane disasters are overblown (pun neither intended nor unintended), and that this company -- spun out from White Mountains Insurance in 2001 -- will regain over the next year at least a portion of the massive 60% hit given its stock. Iron-clad return on capital requirements provide substantial operating margin of safety, as well. Remember, MRH historically has earned large profits on underwriting where the average insurer loses money on its policies. I don't think there's much risk left in these shares. Not my favorite industry, here, but a safe bet to outperform, at $16 and change.
The company undershot its earnings yesterday and is selling off 3% this morning. It's mainly about Hurricane Wilma -- more past expenses than had been previously expected. I view this as ancient history by now. I also believe the hype about a big hurricane season this year, made to seem as if we could even have a repeat of last year, remains unsupportable. Odds-on, this stock beats the market from here.
The pick is up slightly over the past two years. Still five-star stock. Same basic business. I will re-up this one for another year.