【价值一哥按】本文是巴菲特于1953年3月发表在《商业与金融纪事报》（The Commercial and Financial Chronicle）“我最看好的股票”专栏上的文章，文章推荐了西部保险证券。在15个月之前，巴菲特在同一专栏中所推荐的股票政府雇员保险公司，已经上涨了一倍多，这次巴菲特推荐的仍然是一只保险股，这只股票的市盈率只有一倍多，非常符合格雷厄姆的选股特征。
我最看好的股票
这是一个连续的专栏，每周邀请全国各地的投资和咨询领域的专家推荐并分析他们看好的一只证券。
（本专栏中包含的内容不打算也不应被视为交易所讨论证券的建议。）
沃伦·E·巴菲特
Buffett-Falk &Co.,Omaha,Nebr.
西部保险证券
这次我最喜欢的证券仍然是一家年轻、快速成长、管理得力的保险公司的股票。15个月前，我推荐了政府雇员保险公司，现在股价已经涨了一倍多，从长期资本增值角度考虑，它还是不贵。
投资西部保险证券公司，投资者相当于同时投资了两家整体低估而且管理优秀、发展迅速的保险公司。这种投资机会是很少见的。西部保险证券有两个子公司，一个是西部财险和担保公司，另一个是西部火灾保险公司。1952年，它们的合并认可资产是29,590,142美元，保费规模是26,009,929美元。目前，这两家子公司在38个州获得了牌照。表一显示了它们出色的增长速度以及与行业平均水平的比较情况。
西部保险证券公司持有西部财险和担保公司92%的股份，西部财险和担保公司持有西部火灾保险公司99.95%的股份。西部保险证券公司的其他资产很少，按净流动资产计算大概只有180,000美元。该公司的资本结构是7,000股面值为100美元，利率为6%的优先股，可以以125美元赎回；35,000股A类优先股，可以以60美元赎回，每股可定期获得2.50美元的股息，最多可获得4美元股息；还有50,000股普通股。A类优先股目前合计拖欠股息36.75美元。
在雷•杜波克的领导下，公司拥有一流的管理层。从公司1924年创立以来，杜波克先生一直是公司的掌舵人，他在保险行业声誉卓著，为人正直而且能力出众。公司的中层管理人员同样是一流的。在公司成立初期，债券和优先股的成本远高于公司的盈利能力。保费规模在3,000,000美元时，债券和优先股的成本对公司是沉重的负担，但当公司的保费规模超过26,000,000美元时，这部分成本显然就不是问题了。
1952年是汽车保险业务非常低迷的一年，该公司的盈利是1,367,063美元，可以覆盖129,500美元的债券和优先股成本的10倍多，扣除这部分费用后，普通股每股盈利仍然有24.74美元。
显然，普通股的好日子总算来了，但投资者们还没发现，它的股价只有每股盈利的一倍多，还不到1952年86.26美元的每股净资产的五折。表二列出了战后的盈利数字，从中可以看出随着盈利基数的增长，普通股显著受益。在计算净资产时，按未到期保费储备中净资产占25%计算，并且考虑到了优先股的赎回价格以及拖欠的股息。
西部保险证券的保费规模增长处于行业领先地位，读者可能会担心它是否放松了标准。绝对没有。在过去十年里，西部保险证券的各项经营数据明显优于综合保险公司的平均水平。表三中列出了贝氏评级通过逐一对比得出的统计数据，其中选取赔付率和费用率将西部保险证券的两个子公司与所有火灾和财险公司进行了对比。
细心的读者可能还担心西部保险证券是否集中于利润特别高的保险业务。事实恰恰相反。虽说西部保险证券是一家综合保险公司，但是它主要做的是汽车保险业务，保费的60%来自汽车保险。战后汽车保险业务整体来说并不景气，过去三年里更是低迷，所以说表格中的对比还没充分显示出西部保险证券公司的比较优势，它实际上更加优秀。
该公司总是保持充足的未决赔款准备金。从战后的记录来看，该公司每年年末的赔款准备金都比实际需要的金额高。保险监理机构对该公司进行的三年期检查得出了同样的结论。
再看投资情况，投资资产和投资收益与保费规模同步增长。综合净资产从1940年的5,154,367美元增加到现在的29,590,142美元。西部保险证券公司采取极为保守的投资策略，它依靠保费规模的增长来增加投资收益。1952年年末，在21,889,243美元的投资组合中，国债以及分散投资的高评级市政债合计20,141,246美元，占92%，股票投资仅有1,747,997美元，占8%。1952年的净投资收益是474,472美元，在扣除少数股东权益以及债券和优先股成本后，折合每股6.14美元。
在过去几年里，财产保险行业在汽车保险业务上遭受了巨大损失。1952年末，这个趋势出现了强力反转。1951年和1952年，保费大幅上调，今后续保时保费将大幅度提高，这对保险公司的业绩有极大的提升作用。预计1953年和1954年财产保险行业应当能取得良好盈利。
过去几年保险业不景气，西部保险证券公司都很赚钱，随着保费规模增加、投资资产增加以及保费上调，它的盈利能力将更上一层楼。保守估计，1954年，该公司的满期保费规模将达到30,000,000美元。这个保费规模的正常盈利能力应该是平均每股30美元，其中包括投资收益在扣除所有债券和优先股成本后贡献的大约每股8.40美元。
坚守西部保险证券普通股的投资者有理由相信，随着公司的所有者权益显著增厚，普通股股东会得到实质的回报。我们要知道，在过去12年里，两家子公司将保费规模提升了5.5倍左右。相应地，公司需要将留存收益提升3.5倍，所以没能力派发股息。最近西部财险和担保公司提升了股息，今后应该能更及时地发放优先股的股息。如果公司能继续保持过去的高速增长，盈利能力将大幅增加，我认为很难保持过去那么快的增长速度。如果公司的保费规模增长放缓，公司有可能大幅提升派息。
西部保险证券公司所在的行业很稳定，它过去的成长能力和盈利能力都很突出，它现在的股价是40美元，投资这只股票有巨大的资本升值潜力。
该股票在场外市场交易。
The Security I Like Best
A continuous forum in which, each
week, a different group of experts in
the
investment
and
advisory
field
from
all
sections
of
the country participate
and
give
their
reasons
for
favoring
a
particular
security
(The articles contained in this forum are not intended to be, nor are they to be regarded, as an offer to sell the securities discussed.)
WARREN
E.
BUFFETT
Buffett-Falk & Co., Omaha, Nebr.
Western Insurance Securities Common Stock
Again
my
favorite
security
is
the equity
stock
of
a
young,
rapidly
growing and ably managed insurance company. Although Government Employees Insur
anc
e
C
o
.
,
m
y selection of 15 months ago, has had a price rise of more than 100%, it still appear s very attractive as
a
vehicle
for long-term
capital
growth.
Rarely is an investor offered the
opportunity to participate in the growth of two excellently managed and
expanding
insurance
companies on the grossly undervalued basis which
appears
possible
in
the
case
of the
Western
Insurance
Securities Company.
The
two
operating
subsidiaries,
Western
Casualty
&
Surety
and Western Fire, wrote a premium volume of $26,009,929 in 1952 on consolidated admitted
assets
of
S29,590,142.
Now licensed
in
38
states,
their
impressive growth
record,
both
absolutely
and relative
to
the
industry,
is
summarized in Table I below.
Western
Insurance
Securities
owns 92%
of
Western
Casualty
and
Surety, which in turn owns 99.95% of Western Fire
Insurance.
Other
assets
of
Western
Insurance
Securities
are
minor, consisting
of
approximately
$180,000 in
net
quick
assets.
The
capitalization consists of 7,000 shares of $100 par 6% preferred,
callable
at
$125;
35,000 shares of Class A preferred, callable at
$60, which is entitled to a $2.50 regular
dividend
and
participates further up to a maximum total of $4 per share; and
50,000
shares
of
common
stock. The
arrears
on
the
Class
A
presently amount to $36.75.
The
management
headed
by
Ray DuBoc
is
of
the
highest
grade.
Mr. DuBoc
has
ably
steered
the
company since
its
inception
in
1924
and
has
a reputation
in
the
insurance
industry
of being
a
man
of
outstanding
integrity and
ability.
The
second
tier
of
executives
is
also
of
top
caliber.
During
the formative years of the company, senior charges were out of line with the earning power of the enterprise. The reader
can
clearly
perceive
why
the
same senior charges that caused such great difficulty
when
premium
volume ranged about the $3,000,000 mark would
cause
little
trouble
upon
the
attainment of premium volume in excess of $26,000,000.
Adjusting
for
only
25%
of
the
increase
in
the
unearned
premium
reserve,
earnings
of
$1,367,063
in
1952, a
very
depressed
year
for
auto
insurers, were sufficient to cover total senior
charges
of
$129,500
more
than
10 times
over,
leaving
earnings
of
$24.74 on each share of common stock.
It
is
quite
evident
that
the
common stock
has
finally
arrived,
although
investors
do
not
appear
to
realize
it since
the
stock
is
quoted
at
less
than twice
earnings
and
at
a
discount
of approximately
55%
from
the
December 31, 1952 book value of $86.26 per share.
Table
II
indicates
the
postwar record
of
earnings
and
dramatically
illustrates the benefits being realized by the
common
stock
because
of
the
expanded earnings base. The book value is calculated with allowance for a 25% equity in the unearned premium reserve
and
is
after
allowance
for
call price plus arrears on the preferreds.
Since Western has achieved such an excellent
record
in
increasing
its
industry
share
of
premium
volume, the reader may well wonder whether standards have been compromised. This is definitely not the case. During the past ten years Western’s operating ratios have proved quite superior to the average multiple line company. The combined loss and expense ratios for the two Western companies as reported by the Alfred M. Best Co. on a case basis are compared in Table III with similar ratios for all stock fire and casualty companies.
The careful reader will not overlook the possibility that Western’s superior performance has been due to a concentration of writings in unusually profitable lines. Actually the reverse is true. Although represented in all major lines, Western is still primarily an automobile insurer with 60% of its volume derived from auto lines. Since automobile underwriting has proven generally unsatisfactory in the postwar period, and particularly so in the last three years, Western’s experience was even more favorable relative to the industry than the tabular comparison would indicate.
Western has always maintained ample loss reserves on unsettled claims. Underwriting results in the postwar period have shown Western to be over reserved at the end of each year. Triennial examinations conducted by the insurance commissioners have confirmed these findings.
Turning to their investment picture, we of course find a growth in invested assets and investment income paralleling the growth in premium volume. Consolidated net assets have risen from $5,154,367 in 1940 to their present level of $29,590,142. Western follows an extremely conservative investment policy, relying upon growth in premium volume for expansion in investment income. Of the year-end portfolio of $21,889,243, governments plus a list of well diversified high quality municipals total $20,141,246 or 92% and stocks only $1,747,997 or 8%. Net investment income of $474,472 in 1952 was equal to $6.14 per share of Western Insurance common after minority interest and assuming senior charges were covered entirely from investment income.
The casualty insurance industry during the past several years has suffered staggering losses on automobile insurance lines. This trend was sharply reversed during late 1952. Substantial rate increases in 1951 and 1952 are being brought to bear on underwriting results with increasing force as policies are renewed at much higher premiums. Earnings within the casualty industry are expected to be on a very satisfactory basis in 1953 and 1954.
Western, while operating very profitably during the entire trying period, may be expected to report increased earnings as a result of expanding premium volume, increased assets, and the higher rate structure. An earned premium volume of $30,000,000 may be conservatively expected by 1954. Normal earning power on this volume should average about $30.00 per share, with investment income contributing approximately $8.40 per share after deducting all senior charges from investment income.
The patient investor in Western Insurance common can be reasonably assured of a tangible acknowledgement of his enormously strengthened equity position. It is well to bear in mind that the operating companies have expanded premium volume some 550% in the last 12 years. This has required an increase in surplus of 350% and consequently restricted the payment of dividends. Recent dividend increases by Western Casualty should pave the way for more prompt payment on arrearages. Any leveling off of premium volume will permit more liberal dividends while a continuation of the past rate of increase, which in my opinion is very unlikely, would of course make for much greater earnings.
Operating in a stable industry with an excellent record of growth and profitability, I believe Western Insurance common to be an outstanding vehicle for substantial capital appreciation at its present price of about 40.
The stock is traded over-the-counter.
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