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Federated National Holding Company Message Board

  • scottr2958 scottr2958 Nov 18, 2013 9:42 AM Flag

    Comparison to other FL insurers

    I've held FNHC for 7+ years, through thick and thin. It has finally arrived at and seemingly will hold at $12 per share. And maybe go higher, perhaps much higher. I'm probably going to be a long term holder, also anticipating divvy increases along the way.

    However, when I take a quick look at other FL insurers, on some metrics FNHC does not compare very well. Comparing FNHC to HCI and UVE, the respective PEs are 10.5, 10, and 7.8. FNHC the highest (worst). On EV/EBIDTA ratio, the comparisons are 3.6, 2.3, 2.0, again FNHC the highest (worst). The third bad comparison is with Return on Equity: 10.2%, 47%, and 26%....FNHC the big loser on that one. I know these are all somewhat "backward looking" stats, and the future for FNHC looks bright. Still.....last quarter was also a good one for FNHC, so I expected those numbers to look better than they actually do. Finally, "Stock Scouter" on MSN gives FNHC a 5 out of 10 rating (10 being best), while it gives UVE a 6 out of 10 rating (no rating for HCI).

    Don't misunderstand me, I like FNHC and will continue to hold it. But, on those three metrics, the two other FL insurers seem to be doing better. To balance things a bit, FNHC does do better in Price to Book, and in available cash to debt ratio.

    Any thoughts on this....ballen....matsky...and fabulous? We haven't heard from you on this board lately. -Scott

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    • what do i know- but i feel uve could be one of the MOSTundervalued stocks on any exchanges! it takes me time to research 50 -100 cos. to find one or two that are undervalued based on very good fundamentals! can you find one that is at $8.00 price-book around $8.00/ new mgt./ very agressive mgt/ over 4% div./seems over $1.00 per share & possibly a lot more next year/ buying back a lot of shares etc.! if you can- let me know! i have lots of this stock & (regardless of what happens) looks to good for me to pass up! IF- they continue producing this might be a steal! wish you all luck whatever you buy!

      • 2 Replies to matsky5
      • Matsky...I had done my comparisons of FNHC and UVE, and became quite impressed with UVE. Then, reading your post this morning, with your enthusiasm for UVE, I decided to take the plunge and buy some UVE. And I am going to sell my HCI, seeing it double in less than 6-9 months. I think we could see UVE go from $8 to $12 in a year or so, and the 4% divvy is a decent payment while we wait. I've waited 7 years for FNHC, I can easily wait a year, or two or three, for UVE to nicely rise. Thanks for your post. -Scott

      • uve- as far as growth is concerned-if the new mgt. decides to be competitive ( rate & coverage wise & having a fair claims dept.) growth will follow! almost all agents will NOT LOSE renewals regardless of trying to be loyal to a particular company /or companies! they will quickly try to license with new companies or ( if they have one) REPLACE their renewals with one of their other companies that are competitive - to keep their business! if you compete coverage wise / known for a fair claims dept-.then rates will dictate volume of business! loyalty- nice word but not practical when you are losing your income! i know it will be said -a lot of agents are loyal & i agree! to bad they might not be around for long! me- only 35 years in the insurance business!

    • scott, sorry, this is just copy of an earlier post I was going to edit, but I guess I hit 'enter'.
      Here's what I wrote in an earlier post, and I think it still is true:
      "I was comparing FNHC to its Florida competitors, UIHC, UVE, and HCI.

      FNHC is by far the cheapest on a tangible book basis..even after the small jump in price far.

      On a p/e basis, even after the jump today, its still cheaper than UIHC and HCI. UVE has a lower p/e, but then it has zero growth and problems with the Florida regulatory agency for past shananigans, so it deserves a lowish p/e (although its still a strong value).

      FNHC grew at a rate of 90% on revenue over the past year. UVE has zero growth. HCI grew at 54%. UIHC grew at 60%. FNHC grew at 90%....and unlike the others, it did it with no takeouts from state the owned, and less desirable and lower margin Citizens policies. In addition, FNHC states that it expects to grow going forward at a very high rate.

      Plus, FNHC has a referral agreement with Alllstate in Florida....I dont think the others have that.

      So, relative to its competitors, FNHC is cheap and deserves a higher share price, even after todays small uptick.

      The negatives....well, I was just saying that compared to its competitors, there must be some things a competitor has an advantage over FNHC, I just don't know of any."

      Obviously, FNHC is going to announce the pricing of the current equity raise any day now. If it dips, I'll be

    • 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

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