Saturday, May 3, 2014

Installux and KCLI Report Good Earnings

Price$ 42.00
Market Cap$ 460.66 M
P/E TTM15.4 x
Div yield2.6 %
ROE4 %
Installux (STAL) recently reported preliminary year end results for 2013. Revenue was € 108.4 M versus € 113.2 M the previous year. The company earned € 8.1 M versus € 6.7 M the previous year. Revenue decreased 4.3% due to a struggling French economy. But remarkably, earnings were up 20.8% due to much improved margins. The company has not published the full annual report so I don't have the balance sheet numbers. But at this rate the company probably trades slightly above book and at 9 times earnings. The stock is up more than 50% since I bought it a year ago.

Kansas City Life Insurance (KCLI) reported Q1 2014 results. Revenue was $70.6 M versus $78.8 M the previous year quarter. The company earned $5.5 M versus $5.2 M the previous year quarter. The earnings increase was primarily due to realized gains. The company earned $0.50 per share.

Most interestingly, however, is that the company increased equity by $20 M due to unrealized gain and earnings. That is four times the reported earnings! I do wonder how they did this. I read in their 10K that every percentage rise in interest rates causes a $150M drop in equity and vice versa. Their equity is about $750M.

I mentioned KCLI because I just bought back some stock after closing my position a few months ago. I initially bought a year ago at $37, and then sold recently at $48 and now re-bought at $43. So, I have shown that a trader can buy low, sell high, and buy low again. And I can do this indefinitely with KCLI.

Ok, ok, I couldn't resist a tongue in cheek reference to short-term trading.

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