Now that FNHC is out of storm season and writing business hand over fist expect the stock to approach the 12.00 price target and the 100 million market cap. Once this happens the Index Funds will start buying soon as they are forced to re-weight and add FNHC to their funds. When they buy there is no hiding it or market timing they just all go in and start buying. This will give a very strong price pop and create a solid floor at 12 with and upside of 14.00 in my opinion.
Just a bit of caution, wowme4now..... indeed FNHC has posted spectacular results for Q. 3. However, their trailing PE and future PE is 10.5 and 10.7, respectively. That compares to 9.5 and 10.3 for UVE; and 9.5 and 10.3 for HCI; two other prominent FL insurance companies. I am not sure if Yahoo Finance has updated the figures for FNHC, but if you compare tine Return on Equity, HCI shows 42%; UVE shows 26%, and FNHC shows 10.2%. Finally, on Stock Scouter, MSN Money, the recommendation to buy is 5 out of 10 for FNHC, but a 6 out of 10 for UVE. Maybe FNHC will have a spectacular run up in stock price, but on some key valuations, other companies in the same business in FL are showing some better results, at least in some aspects. FNHC does have much more room to increase its divvy, with a payout on earnings of only 9%, compared to HCI with a 21% payout, and UVE with a 42% payout. -Scott
scott, you have to remember in your comparison to UVE that FNHC is growing at a rate of 90% while UVE is not growing at all....its policy count is down year over year. So UVE deserves a much higher p/e since their earnings will continue to grow out in the future. Also, FNHC is growing much faster than HCI. In both cases, FNHC has a better tangible book value...much higher than either. The only metric that UVE is better than FNHC is p/e....but again, going forward FNHC is higher since UVE's has zero growth.
As for the divvy, for the moment, FNHC seems to want to put most of its money in growing the biz....which it has done well.
Still think it won't hit 12 and that the index funds won't be buying when it comes time to re-weight at the end of the year?
If you do you will not only be mistaken but lose out on a nice little pop that firms up the bottom at this number!
I would also like to say that at the rate that FNHC is putting on business they are off to the races as teach month earns another 1/12th of this amazing production! I'm calling 15 by year-end and 18 by June 2014.
I would have to agree with you on your analysis. They aren't growing the book like HCI through take out policies but they are steady adding policies at a very good rate. I could see 18 by June maybe even 25 if something big happens with the shelf registration.
Sentiment: Strong Buy
Thanks for your opinion, wow..... but I believe you are factually wrong on 2 points: 1) storm season is not finished until Nov 30. Yes, it has been a good season for FL insurers, but I read somewhere that 10% of hurricanes/tropical storms happen in the last month of the season, so it really is too early to say we are safe on that score; 2) Index funds will not be "forced" to buy FNHC, in my understanding of most index funds. Yes, they are forced to rebalance, but not necessarily forced to buy FNHC.
Then , your hopes for $12 price are nice hopes, but many of us have been hoping that for the past year. FNHC price broke through the $10 barrier only 3 times in past 5 years, all of them in the past 6 months, only to settle back well below that price, sometimes significantly. In June 2013 it broke through $10.50 but in about 6 weeks it dropped as low as $8.50. That does not inspire confidence in a steady rise.
I'll be happy if we can hold $10.50 from December through, say, March 2014. And then to be holding $11-12 for the rest of 2014. That's ok growth....and along the way, hopefully, some divvy increase.....but not spectacular. Nothing like HCI. Wow. Take a look at that 1 year chart. -Scott
Scott you are still missing the point don't look at the PE the earnings are coming. Look at the multiple of BOOK VALUE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
FNHC has the lowest multiple of book of any of the stocks you mentioned with the earnings growth on the fast track. When this trades in the mid range it will be a $20.00 stock in 2014!!!
I love this stock!