Thursday, August 9, 2007

James River Group Inc.

James River Group Inc. is a NASDAQ listed security that has been trading in a range between $23.63 and $35.31 over the past year. With 15,136,210 shares outstanding, a recent price of $32.83 gives a total market capitalization of $495,256,810. While there are certainly larger companies, James River Group Inc. has definitely earned its place in the pack. Last year, James River Group Inc. created $2.36 in earnings for every share outstanding.

James River Group Inc. is currently priced by the market at 13.90 times last year’s earnings. Many trading multiples around the world are quite attractive these days, but don’t be fooled. A Price to Earnings ratio of 0 simply means that the security didn’t make any money last year.

With a share price under $50 a share and earnings per share in excess of $1 a share, James River Group Inc. could be an interesting value proposition. Consistent earnings are the key to high valuations and this security is well on its way.