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Federated National Holding Company Message Board

  • investorcluzo investorcluzo Jan 12, 2011 1:25 PM Flag

    Article at Business Insider

    Story has a lot of minuses, says the stock is more akin to an option. Thoughts?
    http://www.businessinsider.com/professionals-guide-to-investing-in-insurance-companies-an-anecdotal-example-2011-1

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    • OK, I dropped the sell price down to $3.25 a share at 5,000. Please some one help me out and take these shares at a discount!

    • Maybe I will try to unload my 5,000 shares at $3.30 a share tomorrow? LOL!

    • Let me comment on the article/author: The article is written by an unknown "know it all" who obviously is into himself and likes to "show-off" how insightful he is. We all know this is a turn around company, that has the cash reserves for the necessary time to do it. This guy thrives on being dramatic like: "I would view TCHC more as an option, not a stock". Give me a break. The guy isn't interested in presenting accurate and unbiased content, but rather his cleverness. Don't be influenced by those who rather present words rather than substance.

    • Adverse developments. That is all you have to look forward on this. It does have some interesting observations. Insurerer of last resort, high commission rates. A man only hears or sees what he wants to hear or see, but is there anything upside or factors that could allow one to be more optimistic about this as opposed to what is mentioned in the article? Could the premiums be going up? What if the Florida real estate market improves? Maybe they'll actually have a favorable development (as opposed to adverse)? Also, it seems alot of these types of small insurers are having difficulties and add they're Florida to this and what do you expect? I still think the large discount to book value as a sort of safety margin. Maybe it will turn around and go completely back to book value in 2 years! Keep dreaming.

      • 1 Reply to lennyclue_1000
      • One last question/comment. If they have relatively short maturities on their investment portfolio, and interest rates go up, they can take advantage of this and perhaps increse their investment income. Not sure they need to immediately show they can profitably underwrite, just not loss. A combined ration of 100% is ok, as a first step. Looking for a quarter without a book loss, break even or very small profit would be ok. Some glimmers of hope on the horizon.

    • Interesting analysis, but it still seems like the downside is limited by the amount of net cash and investments they hold, so not sure why it would ever go to zero unless additional liabilities arose.
      If there isn't any value here, then why did HCII offer $5.30 a share, and furthermore, why did TCHC's board think that this was still far too low?
      I would hope they already had a solid turnaround plan in place and didn't want to sell at the bottom, although obviously in hindsight it wasn't a good move, so maybe next time they'll listen to HCII's offer if they can't improve operations in the meantime.

 
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