Afternoon Actions

I sold Lithia Automotive in the late morning for the same reason as Group 1 Automotive.  Mid-afternoon, I replaced the position with PartnerRe.  As I commented at RealMoney:

David Merkel
Bought Some PartnerRe
8/16/2007 3:35 PM EDT
  • Trades well below adjusted book.
  • Reserves are conservative even prior to the fact that they don’t discount their reserves.
  • Reasonable P/E multiple
  • Quality balance sheet
  • Quality management team.
  • Conservative asset policy
  • Not overexposed to southeastern property risks.
  • Position: long PRE

    What I didn’t mention was how much not discounting their reserves is worth after-tax: nearly $20/share.  Take out a few other items, and you get an adjusted book value of around $85 on a very strong and diversified reinsurer.  I can live with that.

    Full disclosure: long PRE