I think thats fair. Competition has led to slightly lowered pricing by 2.5%, (but that is more than compensated for by the expected decrease in reinsurance expense of near 10%. So at least going forward for a year or so, it looks like margins may expand slightly...all else equal. And, in spite of the fact that profits for the sector have been super strong, at least two companies have gone out of business....which shows, imo, that FNHC can continue to increase market share and policy count, in the short run, since just like those two, other companies are not as well run as FNHC and they should continue to add new customers.
I dont see where you get that FNHC's current active policy count is lower than a year ago. In the conference call, the CEO stated that policy count increased by 57% in 2015 year end vs 2014 year end; and then in the Q&A he stated that as of the date of the conference call FNHC added and additional 14,500 year to date....basically a 3,000 policy/week average increase. Please tell me where you are getting your numbers which show anything different.
And the amazing thing is they are not adding any policies from Citizens....its all taking market share from competitors because, well, customers like FNHC better for some reason.
I thought it was a pretty strong report. FNHC is still working through the huge, and I mean huge reinsurance expense increase that occurred last June.....I think given that, the earnings numbers they have been hitting are very high. Imagine in just a short while when they renegotiate their reinsurance premiums......on a apples to apples basis they should be coming down five to ten percent. So even with a small decrease in pricing, they have the ability to hold their margins up. And I am impressed with their continued growth. Again, all the other Florida insurers are barely increasing their Florida policy counts, and many are dropping. Others are picking up poor quality policies from whats left in Citizens. FNHC, on the other hand, continues to take market share from other insurers, and is continuing to grow on an organic basis....still the fastest growing insurer organincally in Florida by far. So far in 2015 they've added 14500 new policies (as of the date of the conf call). Last year's growth was just a teeny bit higher....at the same time they had added 15400 policies. Only a 100/week difference, and last year FNHC had a 57% growth rate in policies.....obviously that cant go on forever.
Anyway, we'll see. Their Monarch initiative was delayed, they thing it will start up by the end of the month...so a three month delay. Still, Monarch should start adding to FNHC's earnings in a significant way in less than a year.
Of course, FNHC continues to be a good trader, so nuttin wrong with selling into strength (for instance on earnings day betweeen 30.5 and 32.5) and looking to buy back lower.
Hua, and would like response from Fabulous: Sorry Hua to hear that you are exiting FNHC for now. I thought you were a longer term investor, but we each have our own style in the market. I agree that the CC talked about competition and FNHC growth was slowed somewhat, but I still think the numbers and tone overall was positive. Obviously the market doesn't agree and the PPS remains below $30 per share. At least it has not collapsed by 10-30%, as it sometimes has done in the past. If it can hold $29-31 range for a couple of months, then we might be set up for better news in First Q 2015. Fabulous, what is your take on the Fourth Q report, Conf Call, and on the price action? Are you terribly disappointed? -Scott
huahua, just in case there was any confusion regarding your post; the actual total policy count was up a lot at the date of the conf call vs the prior year. thed did nont is not down year to date '15 vs '14.
But there were 14,500 new policies year to date in '15, vs 15,300 year to date in '14. So number of new policies per week year to date in 2015 was about 1,812, and about 100 more/week in 2014. So FNHC organic growth is still very high......still way way higher than any other Florida insurer.
As for competition, obviously they've been saying that for the past three conference calls, so not new, but certainly relevant. However, the positive news is that in the FNHC conf call (and also mentioned in UVE and UIHC), they stated that they believe reinsurranace rates (their biggest expense by far) will once again drop, and they expect a near 10% drop in expenses; which certainly would nicely complement any pressures due to competition.
Hello all...well, it appears that FNHC has tested its nearterm low of around $28 and did not break through it. A very good sign. So, since late January, pps has been nicely above $28. And today, 3/31 perhaps will hold on to $31. In this somewhat over-priced market, where can you find a company which ha a trailing PE of less than 10, a forward PE of just above 10, a price/brook of 2.0? Furthermore, FNHC boasts a Return of Equity of 25% and has zero debt! The company has proven growth year-over-year, and good growth plans going forward, though admittedly not at the same high rate of growth as in the past 2-3 years. Its management is seasoned and trustworthy and well-respected in the industry. To be sure, the competition is strong and some drop in insurance premiums, but I am convinced these negatives are more than offset by the strong positives. So, onward to $35...and by the end of the year I would not be surprised to see $38. -Scott.
PPS was down 4% this past Thursday, 4/2, while it had jumped up about 7% over the previous two days. Without any news, good or bad. Stock seems to be a favorite of day traders, etc. who profit from these wild swings in price. But for those of us who are patient, should be a good reward. -Scott
From my recollection, I think I heard an analyst asked for active policy count year to date as compared to 2014 comparable period? The answer was "down by xxx but revenue is up". The follow-up question was retention rate? I think the answer was in the high 80's, I think the xxx above is somewhere between 1 to 2 thousand policies.Since I do not plan to listen to the recordings again, so.hopefully my recollection did not fail me. Regards,
Scott, Fabulous n all, I've owned FNHC shares fm 2007 to 2014 and 2014 to my last post. Done quite well with my holdings. Reasons for my decision to liquidate my holdings temporarily is because I've adopted a wait and see attitude towards FNHC. Why? Some of the obvious reasons are: Competition is fierce-FNHC accounts for 3.5 to 4 percent of their market traditionally, would be very hard to break into higher percentage territory because every insurer have similar retention rates except for Citizens. FNHC's current active policy count is lower than 2014's comparable period count( however CEO claims revenue is higher for this year)
FNHC is reducing premium by an average of 2.5%, an indication of a competitive market to be sure.Furthermore, if you pay attention to most of these small insurers based in Florida, all of them have licenses to write coverage in other states, yet, none of them does significant business besides Florida. It seems they all prefer to eat off the same plate, another indication that future growth are hard to come by, not just for FNHC, it is true for all insurers.I like FNHC, I'm waiting to see what they have done to set them apart from the pact. Best regards,
Hello fellow FNHC followers. So, any predictions for the First Q report in terms of policy count? EPS? Lackluster stock action in the past couple of months, to be sure. From my perspective, the best thing that can be said is that a good floor of around $29-30 has been established, solidly established. Nonetheless, we are down 20%+ from 52-week PPS high of $37. In this current market, where can one find a growing company, with experienced and trusted long-term senior management, with such good past and future PE, P/B, ROA, etc? In this market, I cannot find many companies like that. So my sense is that FNHC is and continues to be a very successful company and with patience will continue to reward us long-term shareholders. You opinions? -Scott
Comparatively, FNHC performed remarkably well in 1st Q 2015. For that, I'm back in as a shareholder again. As I've stated previously, the hyper-growth story for FNHC has ended and the wild gyration in share prices will cease too, but, at the current level I feel comfortable owning shares for long term capital gain. I'm very happy to see a steady increase in head count at FNHC too. Good omen for the future.
they made .68/share excluding the one time losses related to Monarch. Yesterday was an interesting day, I was able to pick up a bunch of shares in the 27's and flip them out a buck higher later in the day....good day to trade.
The conf call should be interesting.
HCI also reported and it beat by $0.28. I am puzzled that their net income was $2.20 vs FNHC 0.68 for roughly same gross premiums written. May be I am missing something and would appreciate any clarification.
I have no position in HCI and heavily invested in FNHC. Still remember their 0.25 quarterly dividends and miss them.
Hey jatink....good to see you posting, for the first time, maybe. Glad to hear that you are also heavily invested in FNHC, and for the long term. There are 2-3 very good posters on this board. Very informed about insurance business it seems. FNHC trades are very volatile, not uncommon to see 20% up or down, over a 1-3 month time period. I have this sense that day traders like it a lot. In my opinion, this is a solid $30 stock, regardless. And once Monarch business starts ramping up, I think it is easily a $35 stock. And in 2-3 years I would not be surprised to see $40. But it will definitely be a bumpy ride up to that point. And if the upcoming hurricane season results in some Florida damage, well, even more bumps. -Scott
Thanks, hua...always appreciate your wisdom on FNHC. I am not as confident as you are that that "wild gyration" in PPS action is ending....I think it will remain until Monarch business takes hold over the next 1-2 years. But, hey, picking up shares at the $25-26 range is a no-brainer, in my opinion. See you back at $30 over the next few months, I suspect. -Scott
Exited FNHC temporarily due to info obtained fm conf call, namely, competition is keen and year to date policy count is down yoy. Will re-establish my position after the 1st q numbers are public. IMHO,the easy part of the growth story is already behind us, meaningful gains will only accompany solid numbers and that will not be easy. Let's hope they can do it. Best regards.