Safeco Corp. will repurchase up to 9.7%, or $500 million worth, of its stock, the casualty-insurance company said recently.

The stock trades for 4x cash flow.

Safeco (SAF) was upgraded from Underperform to Market Perform, Friedman, Billings Ramsey said. Stock trades at a discount to its peers, and the worst news now appears behind the company.

Good insurer

Underperform - Price 60.09 on Oct. 30
by Friedman, Billings, Ramsey
Safeco reported 3Q07 operating EPS of $1.51 [versus] a $1.55 First Call estimate. SAF has consistently had the largest share buybacks of any insurer we follow. [It] bought even more of its stock. In 3Q07, SAF repurchased 7.9 million shares at a cost of $465 million...financ[ing] the present plan with a $700 million special dividend...[N]et premiums written for auto represent 45% of SAF total. Shortfalls in auto segment will be difficult to [offset]. In our opinion, SAF is fully valued at 1.6 times tangible book value. Target: 62.

Safeco recently announced a $750 million dollar buyback which replaces its prior plan.

Last week, a Stifel Nicolaus analyst ugpraded Safeco Corp., just days after the property insurer topped Wall Street's estimate for profit in the second quarter.

The stock trades for 5x cash flow.

From Barron's 8-6-07:

Hold - Price 58.47 on Aug. 1
by McAdams Wright Ragen
"[Insurer] Safeco reported Q2 operating earnings of $1.65 per share, better than our estimate of $1.50 and down slightly from the $1.71 earned in Q2 a year ago. Share buybacks, expense controls and lower catastrophe losses helped offset higher loss costs and a decline in favorable prior-year-reserve development. We have fine-tuned our 2007 EPS estimate to $6.45 from $6.30, mainly [on] better-than-expected Q2 EPS figures."

Safeco Corporation operates as a property and casualty insurance copany in the United States .It operates through four segments : Safeco Personal Insurance, Safeco Business Insurance,Surety,and Property and Casualty other.

Downgraded by Wachovia from Outperform to Mkt Perform

Safeco announced a $250 million dollar buyback.

The auto insurer recently announced that its Q1 profit was down by 12% as a result of lower policy premiums.

Safeco also said it has bought back 39.3 million shares at a cost of $2.1 billion since 2003. That’s an average price of $53.40 which is pretty good considering the stock is currently at $66.

The stock trades at 6x cash flow.

From Forbes

"Talk about a career change. Paula Rosput Reynolds went from working in the energy industry for 27 years (five of those as CEO of Atlanta-based AGL Resources) to running insurance company Safeco. Despite making the switch last year, she's already made some major decisions like moving the company's headquarters to downtown Seattle and reducing expenses, which include employee headcount."