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Federated National Holding Company Message Board

  • s12stocks s12stocks Jun 4, 2013 8:07 PM Flag

    Bruce Simberg Buys another 2000 shares - my take on why.

    On top of the 10,000 shares he recently bought, he bought 2000 more last Friday.
    If you look at the volume since the last conference call a few weeks ago, you can see that there's a lot of interest in this stock. It's unusual for this stock to be trading over 50,000 shares especially this many days after the CC. It looks to me like someone is accumulating shares and probably multiple entities are doing so.
    This makes a lot of sense because according to my "back of the envelope" calculations, the next quarter's numbers are going to be quite positive. I don't know exactly how much, but I'm optimistic about several things.
    #1 The policy count has been increasing dramatically and will continue to do so.
    #2 They can charge a more than adequate rate on the policies to be profitable.
    #3 Number of policies in the most hurricane prone areas have been decreasing. (Tri-county area)
    #4 Reinsurance costs per policy is decreasing probably due to #3.

    It's pretty easy to see that they will make even more next quarter than the $.29/share they made last quarter. Don't know how much more, but it will be more. It could be a lot more if they write the number of policies I'm hoping they can write.

    As they book another quarter of increasing profits, the stock will probably show up in more people's stock screens which should generate more interest in this relatively unknown small cap stock. Most people screen for P/E and increasing eps. I'm guessing that's what's been happening already which may explain some of the sustained increased volume I was talking about.
    People keep comparing this stock to HCI and talk about how great HCI is because it went from ~$6 to over $30/share so quickly.
    Business wise, I don't like what they are doing at HCI at all. I like how people equate strong stock price movement with strong business practices. That's not right. I've been accumulating shares of FNHC(TCHC) since 2010 and I'm happy owning this stock. Now, I'm just waiting to get paid.

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    • Hi Scottr, I've been here lurking for a few years. I mainly follow the business rather than posting on these boards. The majority of people are so swayed by stock price that I find it's pointless to have in depth debate. Just go to any random stock forum where the stock has been up a lot recently and notice how many people talk about how "wonderful the management is". Find a stock that's down, and read about people complaining and calling for new management and talking about how they pay themselves too much.
      Incidentally, FNHC just announced next qtr's dividend at $.03. I think we all would've loved to see them raise it. I'd be lying if I said I wasn't a little disappointed. However, going into hurricane season and with our first named storm ("Andrea") today, I can see that it might make some sense to hold on to the extra cash.
      As far as I can tell, business is good for the foreseeable future. But people are forecasting an active hurricane season though.

      • 2 Replies to s12stocks
      • Hi s12, thanks for your good reply. You are 100% correct, these boards usually swing to the extremes. One has to look for the posting from those with truly calm and analytical minds, and those who give evidence of watching a particular company, its management, its trends, etc. You do seem like one of those. With a couple of others who are posting here. Matsky, you also! Thanks! This is the only board on which I am posting. Who has the time to constantly write about each stock they own, or to interact with the majority of the posters, who type with captial letters and exclamation points. :) Let us weather this season, and in the fall, hopefully, we can look for nicely increased earnings. The last 2-3 hurricane seasons were unusually quite, it seems, and maybe we are due for a more active season.

      • some people would like the dividend raised but personally i would not! a couple of pennies more for each shareholder isn't worth the amount that the company could keep for future major storms. also i like the book value to keep increasing in case of a buy out. if a major storm hit /& they were one of the many cos. affected/ it is basically a FACT that rates would go up as soon as the insurance co could file increased rates! they would have more premiums for future normal yrs.!

    • Hey, s12, where have you been all this time? It seems that only 5-6 of us care to comment on FNHC on these boards, and of those, it seems that only 2-3 of us go back more than 5 years, in the "good" old days of TCHC.

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