| MARKET CONDITIONS These small cap companies are ran by conservative visionaries and are making their plays for more market share. They are growing at a slow but steady pace. Why not ride the wave all the way to the bank. |
We added WellPoint Inc. (NYSE: WLP) to our Portfolio. This health insurer has positioned itself to benefit when the new health care rules ("Obamacare") go into effect next year. A major part of its plan was the purchase of Amerigroup, a Medicare provider, last December. This acquisition is already starting to pay off.
When WellPoint reported second-quarter earnings on July 24th, earnings per share were up 27%. The Amerigroup purchase was a big part of the increase. WellPoint also repurchased 3.7 million shares, more than 1% of its shares outstanding.
Because of its strong earnings growth, we're raising our buy-up-to price to $80. WellPoint is currently trading at $88. Watch for a market correction to bring WellPoint below the buy-up-to price.
On July 17th, RLI Corp. (NYSE: RLI) reported second-quarter earnings. RLI sells insurance on cars, commercial property, machinery, and cargo. Gross premiums it collected were up 11%, and earnings per share increased more than 8%. The CEO reported that market conditions were improving. New products within the casualty division helped spur the increases.
RLI is in our Relentless Dividend Raiser Portfolio. On June 20th, the company paid its 148th consecutive dividend. The $0.34 dividend was a $0.02 increase over the prior quarter. This was the 38th consecutive year that RLI increased its dividend.
RLI is currently above our buy-up-to price. If you own RLI, continue to hold it. We'll notify you if it comes back below its buy up to price of $66.
Cass Information Systems (NASDAQ: CASS) reported earnings on July 18th. In simple terms, Cass manages and pays bills for transportation, utility, and telecom companies. It's another member of our Relentless Dividend Raisers Portfolio.
A major source of income for Cass is the interest it earns on cash it's holding for its customers. For the last few years, that interest has been very limited. Cass has managed well in a difficult environment. This past quarter, transaction volume was up slightly and earnings were steady. Cass is currently above our buy-up-to price. If you own your shares, continue to hold.
People's United Financial (NASDAQ: PBCT) also reported second-quarter earnings on July 18th. This New England regional bank saw both loans and deposits increase. Loan quality was up and loan charge-offs were down.
Earnings per share grew over 5%. That was due, in part, to People's United's continued program of buying back shares. During the second quarter, People's United bought back another 11.2 million shares, about 3.5% of its shares outstanding. It paid an average of $13.63, which compares nicely with its current price of $15.55.
It is above our buy-up-to price. If you own shares, continue to hold them. Despite these great results, we still have a 10% trailing stop on People's United. If PBCT pulls back 10% from it's recent high, sell your shares.
BancFirst (NASDAQ: BANF) is Oklahoma's largest state-chartered bank. Its banks also sit right in the middle of one of the largest shale regions in the U.S. The wealth that's created from all the new jobs in the area will find its way into BancFirst's coffers.
On July 16th, BancFirst reported earnings per share of $0.81, a 6.6% increase from the second quarter of 2012. Asset quality remained strong, and nonperforming assets—loans that are not in good standing—remained stable.
This is exactly the kind of steady performance we expected when we recommended BancFirst in October 2011. It's a member of our Relentless Dividend Raiser Portfolio. In August, when it declares its next dividend, we'll be expecting the next of its annual increases.
We're up 44% since recommending the stock. It recently moved above our buy-up-to price of $45. Wait for a pullback to add BancFirst to your portfolio.
Tompkins Financial (NYSE: TMP) reported second-quarter earnings last Friday. This safe, steady bank has been in business for 175 years. Its earnings per share grew 4%, primarily due to its acquisition of VIST Financial.
Its return on equity was over 10.2%, much higher than the Federal Reserve Board's benchmark of 8.43% for similar banks. That means Tompkins is using our money efficiently.
It recently moved above our buy-up-to price of $44. Wait for a pullback before adding Tompkins to your portfolio.
American National Insurance Co. (NASDAQ: ANAT) is a conservatively managed insurance company selling for 50% of book value. That means if American National had sold all its assets and simply given investors the cash, shareholders would have received $2 for every $1 they had invested.
In a way, that's exactly what's been happening, except American National didn't have to sell its assets. Investors finally began to realize they could buy $1 for $0.50, and they began bidding up American National's price.
If you own American National, continue to hold your shares while the market continues to recognize its discounted value. ANAT's buy-up-to price is $72. Buy shares only if it falls below this price.
When WellPoint reported second-quarter earnings on July 24th, earnings per share were up 27%. The Amerigroup purchase was a big part of the increase. WellPoint also repurchased 3.7 million shares, more than 1% of its shares outstanding.
Because of its strong earnings growth, we're raising our buy-up-to price to $80. WellPoint is currently trading at $88. Watch for a market correction to bring WellPoint below the buy-up-to price.
On July 17th, RLI Corp. (NYSE: RLI) reported second-quarter earnings. RLI sells insurance on cars, commercial property, machinery, and cargo. Gross premiums it collected were up 11%, and earnings per share increased more than 8%. The CEO reported that market conditions were improving. New products within the casualty division helped spur the increases.
RLI is in our Relentless Dividend Raiser Portfolio. On June 20th, the company paid its 148th consecutive dividend. The $0.34 dividend was a $0.02 increase over the prior quarter. This was the 38th consecutive year that RLI increased its dividend.
RLI is currently above our buy-up-to price. If you own RLI, continue to hold it. We'll notify you if it comes back below its buy up to price of $66.
Cass Information Systems (NASDAQ: CASS) reported earnings on July 18th. In simple terms, Cass manages and pays bills for transportation, utility, and telecom companies. It's another member of our Relentless Dividend Raisers Portfolio.
A major source of income for Cass is the interest it earns on cash it's holding for its customers. For the last few years, that interest has been very limited. Cass has managed well in a difficult environment. This past quarter, transaction volume was up slightly and earnings were steady. Cass is currently above our buy-up-to price. If you own your shares, continue to hold.
People's United Financial (NASDAQ: PBCT) also reported second-quarter earnings on July 18th. This New England regional bank saw both loans and deposits increase. Loan quality was up and loan charge-offs were down.
Earnings per share grew over 5%. That was due, in part, to People's United's continued program of buying back shares. During the second quarter, People's United bought back another 11.2 million shares, about 3.5% of its shares outstanding. It paid an average of $13.63, which compares nicely with its current price of $15.55.
It is above our buy-up-to price. If you own shares, continue to hold them. Despite these great results, we still have a 10% trailing stop on People's United. If PBCT pulls back 10% from it's recent high, sell your shares.
BancFirst (NASDAQ: BANF) is Oklahoma's largest state-chartered bank. Its banks also sit right in the middle of one of the largest shale regions in the U.S. The wealth that's created from all the new jobs in the area will find its way into BancFirst's coffers.
On July 16th, BancFirst reported earnings per share of $0.81, a 6.6% increase from the second quarter of 2012. Asset quality remained strong, and nonperforming assets—loans that are not in good standing—remained stable.
This is exactly the kind of steady performance we expected when we recommended BancFirst in October 2011. It's a member of our Relentless Dividend Raiser Portfolio. In August, when it declares its next dividend, we'll be expecting the next of its annual increases.
We're up 44% since recommending the stock. It recently moved above our buy-up-to price of $45. Wait for a pullback to add BancFirst to your portfolio.
Tompkins Financial (NYSE: TMP) reported second-quarter earnings last Friday. This safe, steady bank has been in business for 175 years. Its earnings per share grew 4%, primarily due to its acquisition of VIST Financial.
Its return on equity was over 10.2%, much higher than the Federal Reserve Board's benchmark of 8.43% for similar banks. That means Tompkins is using our money efficiently.
It recently moved above our buy-up-to price of $44. Wait for a pullback before adding Tompkins to your portfolio.
American National Insurance Co. (NASDAQ: ANAT) is a conservatively managed insurance company selling for 50% of book value. That means if American National had sold all its assets and simply given investors the cash, shareholders would have received $2 for every $1 they had invested.
In a way, that's exactly what's been happening, except American National didn't have to sell its assets. Investors finally began to realize they could buy $1 for $0.50, and they began bidding up American National's price.
If you own American National, continue to hold your shares while the market continues to recognize its discounted value. ANAT's buy-up-to price is $72. Buy shares only if it falls below this price.
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