| IEHC |
| Price | $ 4.910 |
| Market Cap | 11.31 M
|
| P/E TTM | 9.0 x |
| Div yield | 0.0 % |
| P/BV | 1.04 |
| ROE | 11.5 % |
| ROIC | 15.6 % |
IEHC reported Q2 earnings that I felt was quite reasonable. The company EPS for the 6 months this fiscal year
is $0.35 versus $0.44. Revenues fell slightly (3%) but the bigger reason for the earnings
drop is that margins fell from 63% to 61%. But last year earnings petered out in the second half and year-end
EPS was $0.63. I expect earnings this year will be at least as good. So this is a long-term growth stock
that is trading at 8x forward earnings.
Apparently, other shareholders didn't agree with me and sold off the stock after the earnings. The stock dropped 10% on the news and I used this opportunity to double my position.
In other news, I closed my KCLI and ITIC positions.
KCLI has run up a bit and it is a cigar butt that probably has one or two
inferior puffs left. But I think I can better deploy my capital elsewhere.
And I sold ITIC because I felt my original thesis was a mistake. The company had
great margins in 2013 due to unusually low claims, and not surprisingly, this is
not looking to be the case in 2014.
Since I commented here before, I will just mention that I sold out of ITIC after the half year results. The company consumed cash over the period, which is a strong sell signal for me.My original thesis as also incorrect, but at least it was a loss with some useful lessons attached.
ReplyDeleteThanks for letting me know! Looks like we both made the same mistake but losing 10% isn't so bad is it?
ReplyDelete