The conference call exceeded my expectations. Monarch is beginning to grow at a reasonable clip, up to $200,000 of business weekly, up from 50-75/week. Their goal (medium-run is my take) is $1,000,000/wek The auto book is growing and there are plans to accelerate its growth. They are planning to diversify more, with active plans of going into Texas and New York. Their is continued growth with FedNat in Florida wit increased policy count. Their rate increase for FedNat of 5.6% goes into effect in August. I think the call was very good. Lots of reason to be optimistic about increase in revenues, earnings and book value. The share price has lots of room to grow.
Sentiment: Strong Buy
At 12 noon, the PPS is up a whopping $2.50, 13% + And the volume is twice the normal, with only half the day behind us. Might hit four times normal volume by end of day. But the day traders seem to be quite active with FNHC, so beware of a potential significant decline from today's high. FNHC has always required patience. And it seems like we have to be patient for quite a while longer, to get back to $30. -Scott
I think that they had a pretty good quarter. The rate of growth is decelerating (as anticipated by management), but there is still meaningful growth in policy count, revenue, book value, etc. I would like to hear tomorrow's conference call before adding many more thoughts. Thus far I am disappointed by the slow roll-out of Monarch. I don't fully understand their approach. 2015 was to test the waters. I thought that 2016 was to aggressively move forward, to attract some of the 88% of the requests that do not fill through FedNat. I wonder what tomorrow's commentary will bring.
I think the quarter was very strong. Ex cat losses, (to see potential) they made .90/share after tax, and cheap on a price to book basis. Obviously, they beat the street, and continue to grow. I mean this quarter was 4.12% sequential growth, which is 17.5% on a annual basis....thats still strong policy growth after the huge growth of the past four years. And FNHC is super cheap on a book value basis.
So what are your opinions on First Q 2016?
Seems to me to be OK, though not quite as good as past quarters. According to their release,
• 27.5% increase in gross written premiums to $136.0 million
• 25.5% increase in total revenue to $69.0 million
• 23.1% increase in Florida homeowners’ policies to approximately 253,000
• 3.9% increase in book value per share, including noncontrolling interest, to $18.89
According to those who regularly post, and my own calculations, here are the previous counts on policies.
Total policy count:
For 2011 was 49,000
For 2012 was 67,000
For 2013 was 134,000
For 2014 was 182, 500
For 2015 was 243,000
Right now PPS is right at about current book value. Seems to be good value at this point. Fabulous, Hua (haven't heard from you lately), and biotechisfun, what do you think? -Scott
IDK Fieldman... I think GEICO was just looking for a quality player in the Homeowner game.
They have access to a few other companies but I think their ability to multi-line all of these HH's (they are the leader in FL auto... btw) with possibly an FNHC product? That could be (could) huge.
It all depends on how well they train and develop the distribution channel.
There has to be a huge incentive in play for GEICO... and if so you may very well see a large increase in PIF.
I say buy low (now) and sell high (for sure $26-$27 by 11-16).
?Don?t get emotional about the stock?.? Gordon Gekko. Yep, I try not to. But I like insurance and think its predictable. And I'm not so worried about a bad storm season, I think it will tighten the market and get the pricing back firm. I actually went back to PGR some weeks back around $33, something I previously said I'd never do. I hated the company when deceased coke-head Peter Lewis was running it, and was not a fan of Talman Howard or John Sauerland (know both personally); but I do like John Auer and think ASI is going to be a good addition long term. You think I rant about FNHC? You shoulda read the #$%$ I used to write about PGR and AIG.
Fact is, most of these publicly traded companies are not performing well. In contrast, the privately held Florida insurance companies are doing extraordinarily well. I am invested in some and know investors in others, namely Safepoint, Southern Fidelity, Prepared, Cypress, etc., Matter of fact, I am probably going to buy into an offering currently out there as Jim Patterson (founder of Long John Silver's) is selling the interest he has in one.
And I do look at the surplus, reinsurance, etc. That's what bothers me about FNHC. Nice $145MM in surplus and a 40% quota-share......! Really? Writing in 3 states but has 21% in tri-county with another 20% of total writings just north of there. And only two event covers. Personally, I'd love to see them go through two events, buy a third with a low PML just to have the next storm blow the roof off of it. Stock would be back around .65 cents a share like it was when Ted was running the company in the ground.
Anyway, if FNHC is such a great deal right now, you should load up on it by all means. I think I'm gonna stick with PGR and not a big fan of WorkComp but may look at AMSF and/or EIG.
Sentiment: Strong Sell
Yeah... I don't know fieldman... Sounds like you have a personal take, from an investment standpoint... don't let the personal stuff guide you. Yoda once said "Do or Do not, there is no try" - so if you don't like baths you may want to put money into another industry. If you graph out all of these FL carriers their trends are all pretty similar, come October if we are spared a major storm season you and most will sing a happy tune.
Of course a bad storm season and you won't.
Look at surplus, look at reinsurance purchased, look at innovation in the distribution system and product offering. Even the biggest companies are down because of how crowded the field is with players that are giving away their product for free (basically).
So you are right about the general insurance market underpricing piece... You are just not right about all the other stuff, the other stuff you are saying doesn't trend stock down the same way for all the other carriers. Lay them one over the other and analyze... You'll see the light.
The Fieldman is The Fieldman, and nothing to be worried about; not obsessed with the board but do comment regularly on here due to the huge drop in stock price and poor performance. And yes, FNHC and HCI are the worst, but UVE was to be expected. Nothing can be said about them that has not been already. And yes, a good storm will separate the men from the boys, and strengthen pricing which is badly needed. Call me "scorned" or whatever, I've taken a bath on other stocks too, but to me these stocks are strictly business and I am only gonna bash when its well deserved.
Sentiment: Strong Sell
Who is this "fieldman" guy?
Anybody worried about his obsession with this discussion board?
Sounds like a scorned ex-girlfriend (don't have a cow fieldman).
Anyway I'm sure there will be a decent rebound... but many of the Florida insurance companies are down. Throw a hurricane into the mix in 2016 - then you'll see who's left "playing the game."
Always wondering how to get in on those 100% + nasdaq, nyse and otcmarkets movers. PennyStock101(org) (search them) are always on the hunt for these kinds of plays before they take off!
Just picked up on this thread and no, there were no winter hurricanes in Florida, its just a shoddy company, shorty and simple. FNHC is worth about $15 per share. And if anyone is looking for another shoddy insurance service company, look to Patriot National. PN could make money but they have so many Executive Vice Presidents, CEO's of subsidiaries, and a multitude of VPs sucking it dry through bonuses, it will never-ever make a profit. They also operate a pathetic insurance company subsidiary called Guarantee Insurance Company which attempts to underwrite workers' compensation but has been a black hole so far. Its taking all the cash the executives aren't.
Sentiment: Strong Sell
Well, they only discontinued the commercial liability program in other states this time last year. It was an epic failure due to who Braun selected to run the program. They're writing auto liability in Texas, but through an MGA program where they are only providing the security. They were recently approved for a commercial property program in FL but have no expertise in-house on underwriting it. They will probably let the same person who ruined the liability program run it and it will be another epic failure as well.
Sentiment: Strong Sell
I think they gave up on the multi-state/multi-line strategy years ago. They used to talk about it quite a bit on the cc's, but then never progressed towards putting a plan into action. The problem now is the Monarch JV. It was a huge strategic mistake. FNHC overcapitalized itself and then didn't write any business in the JV. FNHC has all the expense and capital from the JV without any earnings. It will take too long to grow the JV to the level that they need to get the stock price moving. I think the only solution to boost the stock price is to sell the company. They could possibly get an acquiror to give them credit for the future value fo the JV, but I don't think the public market will.
I'll keep this short and sweet...Google "Penny Stock 101 org' signup for their free newsletter and get their next trade alert. Come back and thank me tomorrow!