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27.0¢ ensurance ltd

This investment seems odd, considering the UK divestment,...

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Imarugbyhooker

431 Posts.

50

01/04/23

00:34

Post #: 67078303
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Originally posted by T.E.P.: ↑

I believe the current leadership team has shown itself to be a safe set of hands. An impressive track record is beginning to be built here ever since the involvement of Tony Leibowitz (and subsequently Tom Kent), and they are backing themselves to continue this success with collective ownership of > 30% of the company (with ongoing on-market share purchases). FY23 and beyond should show a higher profit margin now that the UK business has been sold, and they are doubling down on Australia. At 22c, we have a market cap of ~A$20m and net cash and investments of ~A$8m (of which $1.5m is in KOBA and $2m is in ASX PSI), thus an EV of ~A$12m. The business is set for around ~A$1m in profit in the next 12 months (based on normalised numbers from the last 4c), so by my calculations, ENA is trading on an NTM earnings yield of 1/12 = 8.3%, for a low-moderate level of risk (insurance being a defensive industry). There's no way I will beat that in bonds or a high-interest cash account.

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This investment seems odd, considering the UK divestment, considerable investment in creating an Australian intermediated casualty book... and then this - online Motor insurance?

ENA Price at posting: 22.5¢ Sentiment: None Disclosure: Not Held
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