value and opportunity

Executive summary:

Coface SA  is a relatively simple contrarian “mean reversion” case:

• the company at the moment has some specific issues which in my opinion can be solved
• the industry as such is attractive (within the generally problematic insurance space) with significant barriers to entry and little exposure to interest rates
• Even in a bad case, the downside at current depressed levels is small. A conservative “mean reversion case” would indicate ~75% upside without assuming any growth
• no hard “catalyst” and fundamentally it could get worse before it gets better
• For exposure management reasons, NN Group will be sold and replaced by Coface
• As always the reminder DO YOUR OWN RESEARCH. THIS IS NOT INVESTMENT ADVISE !!!!

The company:

Coface SA is a French “Trade Credit Insurance” company and one of the Big 3 players of this industry which together have 80% market share.

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