Broker snap: Hiscox undervalued on NTA basis

25th Jan 2010 13:12

A market valuation that is 1.1 times net tangible assets (NTA) is 'too low by a long chalk' according to finnCap, which has reiterated its 'buy' rating for underwriter Hiscox.'The investment return for 2009 is approximately 7.2% of the average value of the portfolio over the year. This compares with 6.5% after nine months,' the broker notes after Hiscox's trading update on Monday. 'Hiscox has low investment leverage so it can afford to take a modicum of risk in non-government bonds and equities which enhanced the yield achieved for the quarter and year as a whole,' analyst Charles Coyne said.The broker has reiterated its target price of 370p.