Thanks fabulous for again pointing out the value found in FNHC. As you know, I was starting to think about selling a portion of my shares, back at the $12-13 mark. But you and the other good posters on this board convinced me to be patient. Glad that I held. Of course, back when I first bought some FNHC, the price was $18 or so. But by averaging down, several times....around $5 and $6 per share, I am now very nicely up on my cost basis per share. So in your opinion, what would be a conservative, hoped for price per share by the end of the year 2014? Could it be $19 or higher? Simberg's buying does give some added confidence of higher prices ahead. As they say, insiders will sell for all kinds of reasons...to lock in some profits, to buy a new home or car, or finance their kid's education. But insiders buy for only one reason, at least normally, and that is to make money. Simberg must see even higher profits in the quarters to come. -Scott
scott, in the short run, FNHC is underpriced relative to its competitors, particulary on a price to book basis. Looking at eps, growth, and price to book (where FNHC is still way cheap)....FNHC would have to go over $20...maybe around $21 to be on par with its competitors, imo.
Looking forward, FNHC is growing at a very strong pace, way faster than its peers...from whom it is taking market share. Its biggest expense, by far, is reinsurrance. And FNHC (and the other florida P&C insurerers) has stated that they expect reinsurrance expense to decrease a decent amount upon renewal (in late June)....I believe they and others have stated they expect a reduction of five to ten percent on an equal policy count basis. They've also stated that they would use some of that savings to increase their reinsurrance per policy and lower their total risk; the rest of the saving would go straight to the bottom line.
So, while any single quarter can be funky, looking forward, we can expect more and more policies....each bit more profitable. So, once this works into the system (we will have a bump up in overall reinsurrance since we have so many more policies)......by lets say Sept and Dec of '14, and even more so in March and June of '15; FNHC should be posting very strong eps growth over the next fifteen months, and that should be accompanied by the share price moving higher. I don't know how much, but just look at how far we've come in the past year or two. Of oourse there are always risks with hurricanes or if the sector becomes out of favor, or whatever. But from what we know right now, things look good.
On the other hand, Scott, if you wanted to trade a portion of your shares, trying to capture some swings in the stock; or simply lock in some profits (as you noted, FNHC has risen a bunch of its lows like many stocks), well, there's nothing wrong with that.
$19 by the end of the year is incorrect. If you look at the analysts general consensus number, I believe there are 2 analysts and the consensus is $1.23 eps. That is wrong by a wide margin. They made 46 cents last quarter and they're going to beat that this quarter. I'd be mildly disappointed if the price didn't get into the $20s after they report Q1. IMO if we're at $19 at the end of the year, something bad happened that impacted the company or stock price.
Although he didn't make a huge purchase, I don't think Simberg bought above $16 because he thinks it's worth $19. He thinks it's worth more than that. I think it's worth more than that right now.