tnathan

Bought some more NU - this is a special company

Thank you!

Wanted to follow up here -- does anyone have any opinions on any of the teams at Artisan Partners (Milwaukee based) and the work they do / reputation? I'm not intentionally going down this path, but this opp kind of landed in my lap so might as well see it through.

Thinking about selling HIFS tomorrow -- not sure why that would be up so much but ill take it

Not the ideal ending outcome for shareholders - bought at book but if you've been buying more on dips its worked out ok

Yes - I was looking at banks that trade at fair or depressed multiples of book value that have a clear path to growing book value if rates come down. I own FFBB, unib, and hifs. I think all 3 have good management teams

Agreed but barring a forced breakup of the companies I think the risks are limited. Everyone hates healthcare but we don't actually have the political will to change how its working in substantial ways

I've decided to make a collection of the non Medicaid health insurers 15-20% of my portfolio. Major risk of (a) change in government policy, (b) utilization / loss rates being materially higher than estimates over more than a few years (c) some other major competitive change in the value chain I think are extremely low - with (a) being far lower now than maybe a few years ago with both parties showing no interest in changing the status quo. I think buying as a basket gets you a pretty easy 10%+ per year especially with a few of the MA players (CVS, Humana) now trading at value prices. If multiples ever go up from ~10-12 EV/EBITDA that's a kicker

Does anyone have thoughts on TWFG? They IPO'ed in July here is the s-1 https://www.sec.gov/Archives/edgar/data/2007596/000162828024029560/twfginc-sx1.htm

Per the Fed, terminal rates are not going to be as low as they were previously, but I still think HIFS grows book value ~10-15% per year and will trade up to 1.5x+ of TBV/share as rates fall so there's still plenty of room to run. When the mortgage business picks back up UNIB will truly be a monster their CEO is really sharp

Biggest 2 purchases for me were a couple banks - HIFS and UNIB. Both are extremely well positioned as rates are cut further

Thanks for the input everyone! I think I understand. Completely get that it is just a useful high level exercise to show how ROIC and growth interplay with each other but obviously these growth rates in perpetuity don't reflect the real world

It's definitely my ignorance, but I'm still having trouble translating this into the matrix. Essentially I understand the concept of ROIC and ROIIC and how it interplays with growth, but my trouble is converting that qualitative understanding into an actual solid understanding of what a fair price to pay is. I've seen multiple of these matrices, even ones that Mauboussin has but they never spell out the math behind the concept. Below is an additional Mauboussin excerpt. Can someone dumb the math down and show me simply???

Hi - was reading the piece "ROIC – The Underappreciated Variable in Valuation" from Kennedy Capital Management and am a little confused on the math behind deriving the chart I pasted below. Can someone show a simply DCF with the inputs listed and how that would convert into the investment multiples cited? https://www.kennedycapital.com/media/ROIC-–-The-Underappreciated-Variable-in-Valuation.pdf

HIFS - big position. Can't think of another bank who needs rates to go down more and the valuation is very fair for a bank that will grow TBVPS quickly as rates go down.