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A Rich Haul from Bond Sales


Like most other investors, Richard Steinberg of Steinberg Global Asset Management knows the bottom line on any stock is whether you trust its management. That's one reason he likes insurer Odyssey Re (ORH). Its execs make protecting shareholder wealth a priority over grabbing a few pennies of quarterly earnings. In the second quarter of this year, they gave up some $3 million in investment income by selling $600 million worth of high-grade bonds and putting the money into low-yield, short-term instruments. They got top-of-the-market prices, selling right before bonds tumbled, and piled up $1.5 billion in cash -- allowing them to write more insurance at a time when pricing is strong and weaker rivals are backing away. Odyssey's book value per share is up to $20, so the stock is a bargain at 21, says Steinberg. The p-e is just 13, based on analysts' estimates of 2003 earnings. Steinberg is buying shares and says they could go to 30 in a year. William Yankus, an analyst at brokerage Fox-Pitt Kelton, has raised the stock to a buy.

Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them. By David Henry


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