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Oh yeah I forgot to take account the cash pile whilst calculating the EV. How do I go about doing that properly using net cash rather than just cash (£19m)?

At 37p wouldn't the EV equate to A market cap of 14.8m + 1.87m liabilities (according to the fundementals)? Also why +5%? Btw from working out the EV/EBIT ratio on lots of shares ...well the way I've done it, very few shares have such a low ratio. From memory only MOS comes close to what it is here even after this rise. Looks like your on to a winner here!

Short answer: yes

All we need now is some news to cause a SP rise and a bit of attention and then we're in for great 2014! :)

This is still cheap according to the EV/EBIT ratio

Ratio of 11 ish. Is that any good?

At the current SP the EV/EBIT ratio is roughly 7.2 right? Just checking my sums

Oh I totally misunderstood you haha! No I don't. I feel like this would be a good price to enter in. But I want to wait for the investigation results and I am confident the price has further to fall yet (sorry) so no not yet. I am v tempted though because RSA are a very well respected company etc etc

Cheers for your very thorough response, Jolly. And for that superb Warren Buffett quote too. I clearly haven't grasped the difference between EBIT and EBITDA myself yet but your comment and Warren's has certainly made me wary of the latter! I've got Wednesday off work and I'm going to use it to work out some EV/EBIT ratios here there and everywhere because - I take it - using this ratio has worked well for you in the past right?

He's not my acquaintance. But am acquaintance of a best mate of mine - my mentor when I first joined the london insurance market in 2012 - who worked at the independent himself. He got lucky though because he fell out with michael bright the CEO in time for him to sell all his shares (100k worth) in time. And he wasn't that high up tbf. I think his mate just chose to put all his eggs / most of his eggs in that basket and lost all. And no I don't work at the RSA or any underwriters for that matter. I'm a broker.

Have you not heard about the independent insurance company? It's common knowledge where I work - in the london insurance market - so I thought most people would know of it I guess. Seeing as my asismption was misplaced here is a link referring to the scandal: http://www.theguardian.com/business/2007/oct/24/insurance.crime Now feel free to do research on the company and its dodgy CEO Michael Bright (an he tricked the world - from the auditors to the investors and beyond)

Considering that the fundementals are good with a EV/EBIT ratio of 6 at the moment which is supposedly very low (I don't know cos I've never bothered working out the EV/EBIT ratio before), then how come you haven't invested here? PS - jolly, why do you use the EV/EBIT ratio. Havig done a little reading today I get how it trumps the pe ratio but how is better than the EV/EBITDA ratio? Also why ebitda rather than merely profit? Because EBITDA can be used to hide the true profitability of a company, can't it! The company I work for is a listed company who use EBITDA rather than profit and it makes me somewhat sceptical y'see

I totally agree. Although my worry is what happens if this goes into administration? What then for investors here?

Oh and look who it is - Ben Graham is back from the dead and invested here. This must be a winner!

With my limited funds (v limited) I need companies to be cheap as chips / on a turnaround etc so I'll give this one a miss. Because even if the price drops a little I feel like there's probably better shares out there. Appreciate your comments though mate :)

CNEL is a share I can't even look at or want to hear about after seeing it below 1p and wanting to buy in but was out of cash. Then literally two days later it shot up, and I was absolutely gutted. Haven't looked at it since. Just can't lol. TRAF looks interesting so it's in my watch list but I'm not invested in it (yet). If I did invest in housing it'd probably be either Traf, INL, or Taylor Wimpey. I really like the look of INL btw. I was again v close to buying in at 45p a while ago but I think there's too much froth in the housing market so chose not to. I'm no expert though so you can ignore me. GL

This looks oversold and undervalued. I know this company is really struggling but I'm tempted to invest a little in case of a massive SP turnover once it gets its house in order and the market gives it a fairer value...

I like the look of MIRA and was on the cusp of buying in when there was a 2nd share dilution in as many months which put me off entirely. Now I'm wondering whether I made the wrong decision...

This company has a MCAP that is a fifth of its revenues but it's had declining revenues over the last few years and the profit margin is poor. Not for me this one.

Both of you (jolly and Shan) seem to have a knack for finding under the radar stocks. This looks good from what I can tell and I'm loving all the formulas - it's a big reason I've stuck this on the watch list. So I can try work out my own ratios and see if I've got it correct against yours! Thanks you two (even if I chose not to invest in the end lol)