Silver lining

AMDG

Congratulations to CHIB and to NRCP! The last time I checked market prices was several days ago (I’ve been rather busy lately). Since then, CHIB hiked up from P600 to P620, while NRCP shot from P2.40 to P2.85.

CHIB recently got a ratings upgrade from “Stable” to “Positive”, but I can’t help but feel disappointed with its 2007 net income. CHIB is a very, very solid company, and this is one stock the I bought for the really long haul. Now, though, I’m tempted to move my funds therein to some other company with stronger growth prospects, like COAT, AP or I. Or maybe even AGI.

Will write more after weighing the pros and cons about that issue.

Congratulations also to NRCP for more than doubling its 2007 net income to P609M from P275M in 2006. The increase came about from successful underwriting investments and well-managed operating expenses. The “successful underwriting investments and well-managed expenses” bit is pretty general, but I still don’t have a copy of the full year 2007 f/s. With nothing to pore over, I’ll just have to content myself with the broad overview that I got from the newspaper.

The P609M net income translates to a P0.37 earnings per share, a little more than half of which (P0.20) will be given out as cash dividends for stockholders on record on April 10, 2008. I can’t say I’m not happy I’ll be getting a rather sizable check again, but I’m also concerned about NRCP giving out half of earnings as dividends. Of course, capex isn’t much of an issue for a reinsurance company (please correct me if I’m mistaken about this). However, giving out such a big amount seems to contradict the company’s goal of being a THREE BILLION DOLLAR-company in just three years. As if this goal isn’t ambitious enough WITHOUT giving dividends considering the company’s total assets now is just P10B (note, that’s ten billion PESOS - $250M under current exchange rates).

Lofty ambitions aside, NRCP is still undeniably a good buy. At current prices of P2.85 per share, that’s just a third of book value and just under four times earnings. Had anybody bought it a few days ago at P2.40 (as I would have if I had extra cash), it would have been an even better bargain. Although, on the down side, ROE’s just a meager 6.45% (as of annualized 3q07 earnings, which is just shy of the actual, newly-released 2007 figure), and growth prospects don’t seem to look as bright (unless they really do manage to become a $3B company in just three years) as companies the likes of AP, COAT, EDC or other mining companies that, right now, would classify as speculative investments.

Does it look like I’m writing one run-on sentence after another? Well, can’t help it.

I guess what I’m trying to say is that overall, NRCP seems to be proving itself as a good investment (especially more so if they become a $3B company in just three years…yes, I’m saying it over and over again because I’m rooting for it!). For this, I have to thank my good friend compounder888 for introducing this stock to me. It wasn’t until he told me about NRCP that I did research on it and saw its potential. So, many thanks Chief, even though I have yet to break even with this stock (I’m assuming the same for you too). Best of luck to us both. I’d also like to point out that I’ve already taken two advices you’ve given me (SMDC and NRCP). About time you bought AGI, pre, or COAT.

And to top the morning off, I just got another bit of really good news from my other good friend, spyfrat: PX is initiating a buyback program that involves 10%!!! YAHOO!!! Still no hard details though aside from the percentage that’s going to be bought back, but this is definitely good icing to the cake.