In late January, I pondered the impact of a market downturn for Old Republic International (ORI). Since then, the market plunged and the company was hardly immune. My investment thesis is based on the company's upside potential now that its book value trails its share price.
Property & Casualty [P&C] insurance companies typically have strong cash positions. Some of the cash in an insurance company's coffers is earmarked for future payouts on insurance claims. The remainder is referred to as the “float” which is invested to generate additional income. Thus, an insurance company