Description

NYMAGIC writes ocean marine and aircraft insurance. It is a very well-established company having operated since 1964 and never straying far from the traditional hull and cargo insurance business. The timeliness of this stock derives from two compelling developments- one, an aggressive repurchase program which has seen the company buy back 529,400 shares at an average of $12.94 per share in the first six months of this year an amount equal to over 5% of the outstanding stock and at a significant discount to the book value of $24.59 at 6/30 which I believe is very solid. The company has minimal long tail exposure. Number two- the recent earnings release indicated a firming in rates- the company said "we saw our first increase in quarterly ocean marine premiums in several years, ocean marine premiums appear to be firming and opportunities for new business now appear to be profitable." Add to the mix significant insider ownership of over 50% and a recent shift in the holdings of one trust to what appears to be a more friendly tax environment and it seems likely that this company will no stay independent forever. This is a company that earned $2.67 a share in 1997 and traded as high as 34 in May of 1998.

Catalyst

share buybacks, rates firming, sale of company