Wednesday, May 12, 2010
Clal Insurance company's Embedded Value is about 90% higher than its market capitalization. This insurance companies field is a new investment area for me and EV seems to be the basis to calculate worth. It is calculated as follows:
EV = PVFP + ANAV
EV = Embedded Value
PVFP = present value of future profits
ANAV = adjusted net asset value
Does market cap tend to equal EV? I googled around and apparently they tend to settle at similar levels. Ergo, since Israeli insurance companies are starting to publish their EV, their market cap will rise to the EV. Am I sure of this? Not the least.
PS: Bought some today morning. 4.30 and TASE closes: 3% gain. It started with the right foot.