RE: What''''s the problem with this company?
KFS looks very good on paper.
Its history is that it never seems to get firing on all cylinders. In the past it has disappointed investors at key times
by posting reserve increases, higher expense ratios and highish combined ratios.
Currently investors are unsure about the reserve build ups
being taken at Lincoln General. LG has been posting reserve
losses for several years and at the 1st quarter management
said they were surprised by this. Currently the market seems
to be unsure as to whether more reserve build ups will be
required to solve the problem at LG.
LG is their largest sub. and it has not had a good record.
Granted, their investment portfolio at $65 per share can
cover up a lot of reserve losses.
Without realized gains their Q2 earnings would only have
38 cents.
I have two questions going forward:
1. Will the investment portfolio continue to perform
in the current weak stock market environment?
2. Will LG require them to take a substantial one time
reserve hit in order to really clean up the problem
or has the situation been satisfactorily repaired?