Q: Hi,
What do you think of this assessment and it's impact on the stock long term?
Tim Shufelt's opinion:"management’s assessment that insurance premium increases must perforce catch up with costs, allowing carriers to fund labour rate increases over the long term, and even though labour rates are not directly tied to written premiums over the short term, political action to curb the magnitude of premium hikes represents a growing risk in our view.”
Quoted from TD Waterhouse citing the GLOBE AND MAIL
Thanks
What do you think of this assessment and it's impact on the stock long term?
Tim Shufelt's opinion:"management’s assessment that insurance premium increases must perforce catch up with costs, allowing carriers to fund labour rate increases over the long term, and even though labour rates are not directly tied to written premiums over the short term, political action to curb the magnitude of premium hikes represents a growing risk in our view.”
Quoted from TD Waterhouse citing the GLOBE AND MAIL
Thanks
5i Research Answer:
TD is also citing valuation of BYD, but it never really has been cheap. But we like its consistency, and while there are always risks, insurance or otherwise, it is not showing up in numbers, with 18.9% same store growth and a big 'beat' over expectations. Inflationary and staff pressures are easing a bit and we would not be too concerned here about long term prospects. BYD has proven itself to be a good consolidator and compounder over two decades.