I’m buying these common shares of insurer W.R. Berkley (WRB) as a replacement for the preferred shares that I sold out of Jubak’s Picks on October 6. I think they offer almost twice the upside with just slightly more risk.
I’m a big fan of the very conservative ship run by CEO William Berkley. No financial company has escaped all damage from the recent (and in my mind on-going) financial crisis, but W.R. Berkley has dodged most of the big bullets. The $108 million write-down that WR Berkley took in the fourth quarter, for example, was on invested assets of $12.5 billion.
The upside here is that, as the company told Wall Street in April, it looks like prices in its property and casualty insurance lines are starting to turn. In April the company said it expected prices to improve as weaker insurers abandoned business by the end of 2009. As of October 7, I’m adding this stock to Jubak’s Picks with a target price of $33 a share by September 2010.