Opportunity: July 2024

Could this be the next Berkshire Hathaway?

Introduction 

This month's Opportunity Report features a diversified financial holding company that has a remarkable long-term track record, having returned 19,041% (15.0% CAGR) since its IPO versus 4,499% (11.1% CAGR) for the total return of the S&P 500. It has suffered several self-inflicted wounds in recent years, but we believe that the management team has been open and honest about these challenges and has put in place the measures needed to improve performance. We see several ways for this Company to grow its profitability, including by reinvesting its fixed-income portfolio at much higher interest rates and by deploying its strong balance sheet and ample cash generation into new acquisitions. We believe that this Company represents a rare value opportunity to deliver outsized investment returns in an increasingly expensive stock market, and management appears to agree given the robust pace of share buybacks and its own purchases of the Company’s stock.

With that, let’s invest some time in getting to know the subject of July’s Opportunity Report: