No. of Recommendations: 1

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.

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