RE: Crazy Stuff.......
KFS is not at 5X earnings. Most analysts project $2.65CDN for this year. In my opinion the consensus is low and '06 earnings should be $2.90 to $3.00. This is less than 7X earnings.
The value in KFS lies in their $60 per share investment portfolio which is very conservatively invested and pretty much gaurantees a solid earnings base. The explosive potential will occur when the investment picture allows them to earn a higher rate on their investments.
Their revenues are also about $40CDN per share which is pretty high relative to other P+C companies. Minimal exposure to hurricanes is a plus.
The risks to KFS lay in their exposure to the U.S.$ and the chance of a weak stock market going forward.
My thoughts are this stock should trade in the $19 to $26 range but if all the stars align for them ( inv. return, comb. ratio and reserve redundancies ) earnings could explode and produce a $60 stock over time.
All my figures are Canadian.