Safety Insurance Group, Inc. (SAFT)

MJKpayday (30.60) Submitted: 2/03/08 10:47 AM : Start Price: $37.23 SAFT Score: 30.94

Safety Insurance Group provides insurances mainly for vehicles, property and casualty, and homeowner in the highly regulated state of Massachusetts. Still highly regulated there have recently been reforms, inviting new competitors and SAFT was hammered. Now Mr. Market has provided us with an opportunity to buy shares of a company trading just barely above its book value and 7 times earnings. Although new competition could hurt margins, the new regulations also gave way for insurers to increase premiums. Furthermore, opening the doors to Massachusetts insurance market places a buy out target squarely on the shoulder's one of the states largest insurers by the one of the big boys looking to gain market share quickly. I see the experience of management and the new regulations as opportunities for continued growth and a higher realized valuation of the company easily beating the market.

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