It looks like Florida is going to miss any major storms this hurricane season. Can TCHC make money in Q3 and will they be profitable for all of 2010 as they committed when they passed up the HomeOwners Choice buy-out offer.....I am losing faith as these guys have continued to destroy book value.
Time for management to leave, time for the business to be sold !
The short answer is no. Q3 will be breakeven at best. There is no way they can make up $0.42 in Q4. If the reinsurance premium reduction is $1M/mo, that equates to $.375/sh ($3MM/8MM) for Q4. Expenses have been growing. There's no way they make it without either a major sales push or a restructuring. The premium revenue is dropping which means that the price increases aren't making up for their lost business. If you remember, they have been talking for 2 years now that they made a conscious decision to only write profitable business. That's good, but it only works if the expense structure shrinks to match the revenue.
I do agree it's time for a sale. Wish I had my $5.30 right now, or a dividend, or a stock buyback, or a company sale, or actual earnings, or a competent management team and Board. I'd settle for a good conference call with a detailed strategy plan and guidance. I'm getting desperate.
This stock seems to be almost the perfect definition of "value trap". One holds it because it is cheap on a book value basis, but there seems to be no way to realize the value, and over time the value is depleted. We definitely need a takeover or new management, but one never nows if and when that will occur.