Safety Insurance Still Trading Below Book Value
It’s school holidays so the kids and I have been busy alternatively amusing and annoying each other. It’s been fun and funny, so we’ve laughed.
My draft posts have hit an all time high as I start, but don’t get the mental space to finish anything. So I’ll keep this one simple.
Safety Insurance (SAFT) closed up 2.47% to $34.01. Book value was $39.20 at end of Q2 and will be over $40 when Q3 is announced. At some point in the future the share price is highly probable to be above book value and book value is adding around $1 a quarter.
There’s a nice $0.40 quarterly dividend, 4.7% yield, for patient investors who are prepared to wait for the share price to over-take book value. I have been amused when investors spoke of particular shares as their cash reserve, but SAFT almost fills that role for me. If there is a large market sell-off SAFT is very unlikely to fall as much as the overall market.
SAFT remains part of the bedrock of my portfolio. Their investments are all high quality with no subprime exposure. “All of our mortgage-backed securities were either U.S. Government or Agency guaranteed or are rated Aaa/AAA.”
Please spare me a thought today as I re-enact Daddy Day Care and am besieged by five kids.
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