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Mar 31, 2020
White Mountains Q1 2020 Earnings Report
Reported a decrease in book value per share and adjusted book value per share, driven by investment portfolio performance and the impact of the COVID-19 pandemic.
Key Takeaways
White Mountains reported a decrease in book value per share and adjusted book value per share due to a negative return on the investment portfolio, influenced by the COVID-19 pandemic. However, BAM had a good quarter due to secondary market activity, NSM grew its top line, and MediaAlpha had a record quarter.
Book value per share and adjusted book value per share both decreased 4% in Q1 2020, including dividends.
Investment portfolio return was -4.6% for the quarter.
NSM's top line grew 4% quarter over quarter, and the Kingsbridge acquisition was closed in early April.
MediaAlpha had a record quarter, while PassportCard/DavidShield experienced a decline due to the global slowdown in travel activity.
White Mountains
White Mountains
White Mountains Revenue by Segment
Revenue by Segment
Financial Guarantee Revenue
CapyFin.comAsset Management Revenue
CapyFin.comOther Operations Revenue
CapyFin.com Forward Guidance
The pandemic is impacting the finances of municipalities to varying degrees, and, over time, financial stress could emerge. BAM’s existing credit portfolio is of high quality and structured to be resilient during economic slowdowns. To date, the portfolio is performing as expected: 100% of BAM-insured bond payments were made through May 1.
Positive Outlook
- Continued investor demand for insured bonds throughout the quarter.
- BAM continued to see good opportunities in the secondary market throughout the quarter.
- Primary market began to reopen in April while the secondary market remained active.
- Building a large pipeline of approved and awarded new-issues that we expect to execute as markets stabilize.
- 100% of BAM-insured bond payments were made through May 1.
Challenges Ahead
- Primary market activity came to an effective halt in March in reaction to the COVID-19 pandemic.
- The pandemic is impacting the finances of municipalities to varying degrees.
- Over time, financial stress could emerge.
- The total portfolio returned -4.6% in the first quarter.
- Common stocks and ETFs returned -20.9%, lagging the S&P 500 return of -19.6%.
Revenue & Expenses
Visualization of income flow from segment revenue to net income