Daily Brief Financials: Juroku Financial Group, Mizuho Financial Group, EXOR NV, Bajaj Housing Finance, Iron Mountain, Selective Insurance, Coinshares International, F&G Annuities & Life , Hanover Insurance Group and more

• We update twelve Japanese regional banks, and add two new names, to target beneficiaries of the improving interest rate outlook; also banks with attractive credit quality, capital adequacy and valuations
• We identify the value of equity holdings for disposal among these banks; the lack of near-term easing prospects at the US Fed should support JGB yields and domestic bank valuations
• We add smaller cap Juroku Financial to our buy list of Tokyo Kiraboshi Financial, Gunma Bank and higher risk option Suruga Bank

• Following up on our earlier cross-shareholding notes, in this note we look at Mizuho Financial Group (8411 JP)‘s cross-shareholding.
• Mizuho had a stake over US$100m in at least 34 listed Japanese stocks, amounting to a total of around US$7bn.
• In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.

• Practice of committing to ownership, governance, and leadership alignment with companies similar to other respected examples like Berkshire Hathaway and the Walnbergs in Sweden
• Focus on long-term thinking, staying current through innovation, and renewing oneself to ensure enduring success in business
• Importance of family ownership, stability, and long-term thinking in combination with the benefits of being a public company; John Elkann’s background and path to leadership within the family-owned company.

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• Bajaj Housing Finance (BHF IN) is looking to raise around US$830m in its upcoming India IPO.
• BHF is a non-deposit taking housing finance company engaged in mortgage lending since FY18. Its mortgage products include home loans, loans against property, lease rental discounting and developer financing.
• In this note, we talk about the not-so-positive aspects of the deal.

• Short recommendation for IRM due to reliance on core document storage business and highly leveraged balance sheet
• Weak cash flow generation and recurring addbacks in adjusted metrics make stock appear more expensive than it is
• Concerns about terminal value and ability to meet cash needs raise doubts about long-term viability of the business

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Selective Insurance Group recently disclosed its financial results for the first quarter of 2024, providing a mixed picture of achievements and challenges that offer a nuanced view for investors.
• The company posted an operating return on equity (ROE) of 11.7% and reported a 16% growth in net premiums written, driven primarily by strong pricing, steady retention, and continued exposure increases.
• However, these positive developments were somewhat overshadowed by a combined ratio of 98.2%, which was above the target of 95%, largely due to increased reserving actions.

CoinShares International (CS) is a pioneer and a well-established player in the nascent, high-growth digital asset industry. The company recently introduced a dividend policy to pay out between 20% and 40% of its total comprehensive income adjusted for currency translation differences. This is underpinned by the steady income from management fees and capital market infrastructure activities, including rewards from staking digital assets, most notably Ether following the recent major upgrades to the Ethereum blockchain network.

• F&G started the year with robust first-quarter results, demonstrating a strategic focus on growth and maintaining a balanced capital management process while transitioning into more capital-light strategies.
• The company reported gross sales of $3.5 billion, marking its second-highest gross sales performance on record, which was a 6% increase from the previous year.
• This performance was driven by sustainable momentum across their multi channel new business platform and strong demand in a volatile and higher interest rate environment.

• The Hanover Insurance Group has demonstrated a strong start to the year with robust financial and operational performance in the first quarter.
• The company’s disciplined approach towards margin recapture, effective catastrophe management, and strategic growth initiatives are likely to continue supporting its profitability and shareholder value in the medium to long term.
• The Hanover Insurance Group reported after-tax operating income of $112 million or $3.08 per diluted share in the first quarter, representing an operating return on equity of 15%.