Mr. Braun (CEO) has shown a great ability to lead Federated National Holding Company in a honest and positive direction. The numbers speak for themselves. The growth in gross written premiums, earned premium, and bottom line profit to shareholders should contest anyone that has a willingness to go against this well managed corporation. I could write a book contesting those that think differently but the facts are the facts. Reinsurance contracts cost being up are only relative to gross written premium, managements ability (specifically Mr. Braun) to grow Federated National going forward has been proven in the numbers. I can show numbers all day but when you listen to the conference calls, analyze the numbers, and understand the honest management that is in place you will come to the same conclusion that I have.
Mr. Braun stated in the first quarter conference call that reinsurance would double from 68 million we came in at an estimate of 117 million that is a decrease fabulousoodle.
What is the reason for the increased reinsurance costs? In particular how much of that is due to the fact that they have many additional new policies to cover? In other words this information could be very bullish instead of bearish, depending on the details of course.
Thanks for your dialogue ballen and fabulous! I have benefited much from your thoughts on FNHC over the past couple of years. Like you fabulous, I bought quite a bit of FNHC when it was as low as $3 and also at $5 and $6 (while originally buying at $18 years ago and being very, very patient). So now I have a nice profit and sold some a while back.
I think you both would agree that the main thing to wait for, at this point, is the next quarter results and the conference call. You also both would agree, I think, that the management has urged patience and that our patience as shareholders has been nicely rewarded in the long term. As they said it would be. So for me, it is mostly a matter of respecting those officers and senior managers that I am willing to keep holding. Also, if you look closely at the charts over the past 2-3 years, it is common to see a 10-20% correction in the price, especially when the price runs up too quickly in a few months. That, for me, is another reason to keep holding. Over the past 3 years, after a stock price correction, the price has always eventually continued higher, breaking into new highs. Always. I'm not a chartist, but this seems to be a regular, recurring pattern in the
pricing of the stock. -Scott
ballen, I agree that FNHC has quality and honest management. I am not going against them. I have owned them since the mid $3 dollars, and AVERAGED DOWN as it headed into the two's (you can check my super old posts). I have listened to every conf call over the past four years, and participated in a bunch. I was positive about them from mid 2011 until now. You can check my posts.....when others were saying negative things about FNHC I was positive, saying any dip was buying opp.
But lets face it. Its not only great management that has helped FNHC these past three years, the entire Florida Prop and Casualty isurance sector has gone up....see, HCI, UIHC...even the poorly run UVE. Huge rate increases, coupled with large reinsurance expense reductions PLUS no hurricanes has both hugely increased their bottom lines.........and expanded their p/e's. But I also remember when FNHC (then TCHC) went up to over $30 in 2006 on huge earnings increases.... and five years later it $2.30. Rates are now beginning to decrease (with new competition)....and reinsurance will at some point start to increase. It seems to me that right now, with this huge increase in FNHC's expenses...we may be at or near a turning point. Of course if we never have another hurricane, Florida insurers will do well.
While I agree that your analysis of the Florida property insurance sector is in a profitable situation, there are differences in the four main players. UVE and HCI are different from each other but they both were paying huge dividend to shareholders through the period when FNHC (once TCHC) and UIHC were in consolidation . HCI has grown just through take out policies from citizens, there business strategy has many flaws. The only two players that when looking at the numbers are value/growth investments are FNHC and UIHC. The other point I have seen is that UIHC and UVE are both pushing for policies outside of Florida. HCI is the worst of the bunch but that is my opinion based on the corporate strategy. HCI just bought out another company to gain policies and UIHC was going to buy Sunshine State Insurance but it was terminated. How is it that FNHC has no problem gaining policies and growing at this alarming rate while other players are in need to grow inorganically or move outside the state? FNHC has made it clear that Florida is there bread and butter and there ability to bring a great service to policyholders is creating goodwill in the market place. The growth story could just be beginning.