No. of Recommendations: 1
Peter,

Agreed on your take on ROC for financials. In a well-run insurer the float should be no cost or very low cost. In a bank the deposits are either no interest or very low interest funding sources. Typically the straight debt an insurer or bank has as a percentage of total liabilities isn't all that large (though companies of course vary here).

When I look at financials I look more at return on equity over a several year period, and how conservative/responsible the company has been on avoiding blowups in the past.

Also agreed on the puzzle as to why BBSI is keeping all the float in cash. Haven't looked at BBSI at all other than the cursory look this weekend to answer the original poster's question, so no idea there. Worker's comp is notoriously long tail. I'd imagine some of those assets would get invested in a longer term, higher interest rate vehicle, but maybe BBSI is concerned with rising interest rates near term.


Mike
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement