The Tycoon Report

ANOTHER BRICK IN THE WALL: The recent investigations into the insurance industry have brought fame to Attorney Generals around the country while wrecking havoc with share prices. Is there moneyto be made among the destruction?

INSURANCE BROKERS HAVE BEEN THE worst-performing group in the Standard and Poors 500 Index over the past 13 weeks, down 30% versus a 9% gain for the index.

That's even worse than the performance of the pharmaceutical industry after Merck’s Vioxx news - It's only off 3%! So for all of us would be Tycoon's who've made small fortunes investing when nobody else wanted to, we've decided to study the insurance industry to see what we could find.

But first - before we could great bargains, we needed to look at the overall industry to see if the wreckage was complete. Here's What We Found Among Insurance Brokers:

1. The companies' average forward price/earnings ratio of 16.2 is lower than the S&P 500's median of 18.5.

2. The group's average PEG ratio -- its P/E ratio divided by its projected long-term earnings-growth rate -- is 1.0, lower than the S&P's PEG of 1.6.

3. There are some very attractive dividend yields.

Not too bad, but nothing to write home about. So we had to dig deeper. We decided to look past the insurance brokers to the insurance underwriters. Why underwriters instead of brokers?

First of all, Insurance Underwriters haven't fared too well during the past 13 weeks either - their shares are down 8%. But check this out: Brokers will no longer be able to get fees for referring clients to certain underwriters. This will hurt their bottom lines big time. But underwriters? If you're a strong underwriter with a great brand name brokers are still going to send business to you because your clients are looking for SAFETY!

Therefore, Underwriter's with a strong capital base and brand name Might Actually Save Money Because They Don't Have to Pay Extra Commissions for the Biz!!! That leaves us looking at what we should be buying among the insurance underwriters. Hint: Large brand name large capital base cheap price = Good Bargain.

Want to know our number 1 stock of the group? We break it down in our November Issue.

Open minds mean larger wallets,