Vardia Insurance Cooking The Books?

Vardia Insurance were expected to announce their Q4 today, but instead they gave the market the message that the financials for Q4 will be announced tomorrow. On the top of this they also halted the trading in the stock until the release of the results.

Vardia's comment today were this:

The postponement is due to new information received from the Company's auditor regarding accounting principles. Vardia has after consultation with Oslo Børs decided to suspend the trading of the stock until the results are published.

In addition to the comment  Aleksander Nordahl IR-responsible at Vardia stated during the day that this were the case, with the vague explanation:

We have received new information from the accountants and has in discussions with Oslo stock exchange suspended the trading in the stock.

So what could all this mean? It's at least not positive for The reputation thats for sure. Experience say me that is use to be bad when stocks getting halted due to accounting troubles, but who knows (still hasn't forgot the cold shower from Tesco). 

I have actually been speculating the whole day on what a valid reason could be for the postponement and the halted trading and came up with these four options which I see are the most likely ones:

• Formalia. Could be some sort of error in the way of presenting the numbers which led to no signature from the accounting firm which validates it. Things that speaks for this is that the message came as a lightning from the sky and that they only postponed it one day. I am still concluding that this is the dream scenario and consider this the most unlikely one.

• Tax issues. Speaking for it; have been on the wall before. Still doesn't see this scenario is very likely either, one day postponing is way to less for a tax problem. Worst case scenario there will be a new issue of the stock.

• Assets. The assets are not what they should be. Could be due to different things, most likely some issue regarding the acquisitions Vardia made in the past. Worst case scenario huge new issue which fails and bankruptcy. 

• Income/Costs/Reserves. Miscalculus in some way of the cost of goods sold, revenues or that the reservations for the Insurance business has been to low. Worst case scenario here will be a new issue of the stock. This option is the most likely from my point of view.

On the other hand we still have the sales (which should be correct) and the GWP which is backing up the case.
Whatever happens tomorrow the stock will most likely open down and that could open opportunities for more purchases. Tomorrow will be an interesting day!

Remember that this is only speculations and hopefully transparent facts will be announced tomorrow.

Best regards,
Eighth Wonder Investing



Full disclosure: I am heavily invested in Vardia Insurance Group with 3200 shares.

Thoughts About Settling Down

Today I asked myself that question, what would I really do with more money or if I were financial independent?. The question is really hard to get and very vague.
The definition I have for more money are financial independence.

Let's start with financial independence, which differs a lot between people. When are you really financial independent? For me personally is that question impossible to answer because it depends on so many factors, as everything else in this world..

Wikipedia is stating that financial independence is a state a human has when he or she has sufficient wealth to live, without having to work actively for basic necessities. Often financial independent peoples assets generate more income then their expenses.
Another definition comes from a survey done 2013 by Capital One 360. The survey states that 44% of U.S adults said financial freedom meant not having any debt, 26% said it meant having enough saved for emergencies and 10% defined it as being able to retiring early.

From my point of view neither Wikipedia nor Capital One 360 has right here, just because of the simple reason that it depends so much external factors that its so hard to answer this question, especially for me at an age of 25.

Let's bring up a scenario.
I guess a lot of people like me wants to live in a nice neighborhood, fancy car and friends with the same mindset around you. In other words this neighborhood will be wealthy and to a certain extent contagious. Why? 
People with high incomes consumes a lot, which enriches corporate to small medium business and those companies will start to demand manpower. These things is pushing salaries north and then the snowball is rolling with the society as a winner and me as financial independent as a loser?

I dont know but its a good thing to think about, should you choose to settle down in a more "expensive" neighborhood or in a cheaper region like Asia for example.
I will definitely put that up on my to-do-list, what is actually financial independence for me.

Besides the philosophical thinking I am working on a general analysis of the fast food industry, which will probably be done and posted in the upcoming weeks.


Best regards,

Eighth Wonder Investing

Marvelous Company, Marvelous Numbers - Protector Q4 2015

As probably no one has missed by now in the blog world, Protector's Q4 report was astonishing and the stock market received it with open arms. Protector is now up 10.11% since the announcement of the report.
The best announcements in the report from my side were that Sweden and Denmark are now showing profit and that is under extreme growth. Sweden is growing GWP by 121%, Denmark with 89% and Protector overall with 28% to 2375M NOK (1861).

Here are some more candy from the report,

• Protector forecast higher profit 2015 and with 18% growth.
• Protector increases the dividend from 1.75 NOK to 2 NOK. 14.28% increase!
• Combined net ratio down to 84.5% from 86.7% last year.
• Investment portfolio know has a value of 4 958M NOK up from 3 999M NOK last year.
• Profit per share grew from 3.47 NOK to 4.63 NOK.

New target price for Protector are 68 NOK, this comes from that I think they will make around 5.785 NOK per share. Which means a profit growth on 25% and a future P/E 11.75, should be doable for the great company Protector!

Besides Protector's marvelous announcements I have increased my share in Vardia Insurance at the price 27.9 NOK with 1400 shares. Total numbers of shares in Vardia are now 3200 shares and a total market value of 102 486 SEK. I will continue to grow my shares in Vardia since that it the most udnervalued company at the moment.

Best regards,

Eighth Wonder Investing

Vardia Insurance - January Sales

Vardia Insurance continue and continue to deliver good growth and over my forecast sales also the month of January.
As I said in on of my previous posts: What Could We Expect From Vardia In Sales 2015 my forecast were 89.3M NOK and sales came in today at 92.6M NOK compared to 79.5M NOK last year. Which is completly magnificent!

The first month of sales could also be a good guidance for the next month sales if we just apply it on the assumed working days there will be in February 2015, which is 18 days.
18 days gives us a sales forecast on 119M NOK for February, which sounds a bit high for me but I am confident that Vardia will make over 110M NOK in February, which will be a new record in sales for a month.

Except the sales figures CEO Ivar S. Williksen also said today that Denmark's sales figures are growing as expected and that they also have increased significantly the commercial business in Sweden, and along with our in-house sales forces of agents and brokers they have the goal to be the best selling Nordic insurance in 2015. Impressive!!

On top of the sales figures Vardia has also got a really interesting customer, the Swedish Police Association which has over 20 000 members and are now leaving Moderna Forsakringar for Vardia Insurance Group. more info could be find here: new alliance for Vardia (only swedish).

I am actually surprised that the share price weren't heading north today after this numbers, but I guess as long as DNB Markets are pouring insane amounts of Vardia shares on the market I do think it will be hard for the share price to get higher. Although nothing to complain about since I could be in need of some more Vardia shares at this price.

As said before 2015 will be the year for Vardia Insurance group!

Best regards,

Eighth Wonder Investing



Note: I will increase my share in Vardia in the upcoming days, weeks, months, years.

Full disclosure: Long Vardia Insurance Group (VARDIA)
Disclaimer: All text on this blog is not any form of investment advice, this is only for personal use.

Summary of January

Time for the summary of the first month in 2015. 

Must say that it has been a great month, a lot of action, but great.

Let's start with the first thing, I actually sold (it doesn’t happen often) Tesco this month.  I haven’t been very impressed about how they have been performing over the time I owned the stock, declining sales almost quarter after quarter and accounting troubles etc. After the last increase of the share price I decided that it’s time for me and Tesco to say good bye to each other for this time at a share price in SEK after costs of 85.490 SEK (TSCDY, OTC).

In other words the portfolio at the moment are only consisting of 3 companies, Protector Forsikring, Vardia Insurance and Hennes & Mauritz. I must admit that for me a portfolio consisting only of 3 companies are way to focused. The target is to own a portfolio consisting of 5-8 companies, but as you probably noticed its hard to find wonderful companies at a fair price when S&P 500 are doing new highs every week.

Next buy will be Vardia Insurance if their sales numbers for January are in line with my forecast.

Achievements January 2015

• The portfolio had a great performance the last month and are up to today had an increase of 12.12% this year with a total value at 239 703 SEK (approx. 26 330 EUR). 
• In terms of savings was 12 000 SEK transferred to the portfolio for future stock purchases.
• New ATH (all time high) for the portfolio.
• Amortized my student debt with the total amount of 1893 SEK, not much but still in line with the goals.

Improvements for February

• Save more money, still wasting money on things I don't need.
• Do more analysis of companies.

Transactions updated with the sell of Tesco.

Transactions:

2015/01/27 – SELL Tesco – 487 share +41 638 SEK

2014/12/30 - Dividend Tesco +165.3 SEK

2014/12/17 - BUY Vardia Insurance Group - 1000 shares - 26 911 SEK
2014/12/17 - BUY Protector Forsikring - 720 shares - 24 820 SEK
2014/12/16 - Dividend MCD +521.34 SEK
2014/12/09 - SELL MCD +54 810 SEK
2014/10/08 - BUY Vardia Insurance Group - 800 shares - 23 647 SEK
2014/07/16 - Dividend Tesco +1728.49 SEK
2014/07/08 - BUY Protector -720 shares -30 983 SEK
2014/06/17 - Dividend MCD +430.4 SEK
2014/05/17 - Dividend H&M +1662.5 SEK
2014/03/19 - Dividend MCD +411.12 SEK
2013/12/17 - Dividend MCD +425.57 SEK
2013/01/07 - Dividend Tesco +712.98 SEK
2012/05/10 - Dividend H&M +1662.5 SEK
2011/12/12 - BUY H&M - 175 shares - 37 376.6 SEK

Best regards,

Eighth Wonder Investing