AICI Capital Trust 9% Pfd (fka AICPQ)

[mrholty]

I don't think you'd want to take it activist quite yet. The problem is the only person that is really in control here is Michael FitzGibbons, the administrator. Remember he is paid by the State of Nebraska Insurance commision to make sure everything is cleaned up smoothly. Nothing about equity or growing the business.

This company has two forms of value to be realized.

1. Positive book value, value will be unlocked after Granite Re is cleared.
2. NOLs - I believe these would be lost in a change of control (buyout). So I don't see a buyout making sense.

Recap, yes. That said, lots of insurance companies are selling for less than book today. Lots of life companies are realizing that its a commodity game and are in runoff mode (rolling over premiums but not managing a sales force writing business), add in the crappy yields on bonds and the whole sector is cheap in some regards.

I need to rephrase what I meant about burning cash. The Book is flat to down a few hundred thousand since I've been watching it, not real material. When I first invested I was actually hoping that interest rates would rise and the interest earned would more than cover the minimal expenses, or a free kicker.