White Mountains Insurance Group, Ltd. (NYSE:WTM)

White Mountains is a Bermuda-domiciled financial services holding company with business interests in property and casualty insurance and reinsurance.

WTM usually trades between 1X and 1.9X book depending on where in the insurance cycle we are.
Right now (10 January 2012) book is listed as $451.42 and WTM is trading at $457. So, it's trading
towards the low end of the range based on the LISTED book value.

Here's the point:
On 18 May 2011 White Mountains announced:
White Mountains Insurance Group, Ltd. (NYSE: WTM) today announced it has signed a definitive agreement to sell its Esurance and Answer Financial businesses to The Allstate Corporation (NYSE: ALL) for an amount in cash equal to $700 million plus the tangible book value at closing of the entities being sold. Esurance sells personal auto insurance directly to customers online and through call centers. Answer Financial is one of the largest independent personal insurance agencies in the United States. White Mountains expects that the transaction will increase its adjusted book value by approximately $80 per share.
and on 7 Oct 2011 White Mountains announced that the sail had been completed.

This added book value of $80 per share hasn't been added to the listed book value yet. The current actual book value is about ($451 + $80) $531 per share. Currently WTM is trading at (457/531) .86X book value.
This is, of course, crazy. Why is it trading so low?
The annual report should come out in the end of February and they will post their book value on the handy graph on their
website:http://www.whitemountains.com/default.cfm
and the share price will rise to $531 or so.
It's a "sure thing". If anybody offers you a "sure thing" in the market, you should run (not walk) away.
That noted, I'm in on CAPS and I'm in with real $.

Share price appreciation

Insurance companies aren't valued correctly and this book value is too low

Overvalued

By Reader Request: Here's What to Buy If You're Opportunistic … but Still Scared - TMF staff

Here's the buy rec:
http://www.fool.com/investing/general/2011/02/24/rising-star-buy-white-mountains-insurance-group.aspx

Just too undervalued at this point. Trading at 0.8 times book value, solid management has grown book value at 10% CAGR over the past decade. Conservative for sure, made it through the financial crisis in one piece, lots of fixed income investments. Not going to set the world on fire, BUT at these levels it will come back. Trades at average 1.4 times book value over the last decade. No conference calls, no guidance, three analysts follow it, one that just flies under the radar. Not mine though, thumbs up for these guys. They aren't getting any credit 'cause the market thinks they missed the boat with this run-up. But WTM won't just invest to invest. Gotta be value there or they'll let the capital sit on the sidelines until the right deal comes along. Good for them I say.

This stock should have bottomed out. No way to go but up

Currently at $310 vs. adjusted book value of $378 for a .82 ratio (see http://www.whitemountains.com/).

mungofitch 8/11/09: "They usually trade 1-1.9 times book depending on the insurance cycle, and book usually rises a jagged 9-11%/year [...]. I plan to sell the next time they are tradnig at 1.6x adjusted book [...]. Even if it takes 7 years and they increase book at 'only' 8%/year, that's 19%/year compounded."

I like the low book value. Of course, the thumbs up from Buffet doesn't hurt either.

I don't really have any new tricks. Insurance companies make money on investing the float that they get from premiums. Stocks are cheap now so the value of the whole insurance firm goes up when the market rebounds.

Their assets are performing way better than I expected

Value!

PICKIS BY ROBERT2CAB53@YAHOO.COM
WORLD MONEY ON WALL STREET.COM

This is a mungofitch pick.

The story is that this is selling at .8 of tangible book.

It usually trades at 1.something. So reversion to the mean

will win on this.

High P/E ratio, weak earnings growth, Buffet selling...thats enough right there.

WTM

Solely on basis that WTM is a the bottom of a very long cycle and with any luck poised for long climb back.

A bit confusing here; mlknyu stated Buffet sold his shares however james0311 hinted Buffet is the reason behind his outperform pick.