business

Old Republic's Big Name Fans

For a pretty conservative property-and-casualty insurance company, Old Republic International has collected a mighty impressive group of aggressive investors. Among them: George Soros, Mike Steinhardt, and the Odyssey Partners.

What gives? For one thing, Old Republic shares have been big winners since 1990--and they're still on the rise. This year, the Big Board stock climbed from 21 in late May to 257 8, after a hefty 45% advance last year. Yet Old Republic shares are only trading at a price-earnings multiple of 10--or a 50% discount to its peer group's p-e.

"Old Republic shares represent attractive value" when compared with other multiline insurers, argues Carol Manning, an analyst at Prudential Securities. Old Republic derives some 75% of its earnings from the property-casualty business. Recently, title and mortgage insurance have been an additional source of big earnings growth. The outlook there is favorable, adds Manning, because of improving markets for those businesses.

Investment Manager Manny Weintraub at New York's Shelby Cullom Davis has added to Shelby's stake in Old Republic because of the "increasing value that we see in the company." As a niche player in such fields as workers' compensation insurance, management has shown a capacity to control its costs and risks very well, says Weintraub.

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