White Mountains: With Two Catalysts, I Am Upgrading It To A Buy
I previously rated White Mountains Insurance (WTM) as a hold, waiting for the price to fall below book value before buying. Recent market volatility and tariff announcements caused WTM to drop below book value, triggering my interest. WTM made two strategic investments: $150m in Broad Street, a commercial P&C insurance broker, and an undisclosed sum in Enterprise Solutions, an electrical contractor.
White Mountains: A High-Quality Insurer At A Fair Price
White Mountains avoids competitive insurance sectors like auto and homeowners insurance, instead focusing on specialized, high-margin businesses where underwriting expertise is a key advantage. The company reported 7.9% growth in book value per share, a 12.35% free cash flow yield, and maintains a conservative balance sheet, reinforcing its ability. Trading at a 1.01x book value, significantly below peers like Markel (1.49x) and Chubb (1.8x), White Mountains presents a compelling long-term investment for those prioritizing steady returns over short-term momentum.
