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Federated National Holding Company Message Board

s12stocks 10 posts  |  Last Activity: Aug 6, 2014 10:04 PM Member since: Aug 19, 2010
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  • Reply to

    Horrible Secondary offering

    by s12stocks Aug 1, 2014 9:54 AM
    s12stocks s12stocks Aug 6, 2014 10:04 PM Flag

    ok, obviously you are looking at this vastly differently than how I value stocks, which is as a die hard value investor. I disagree with most of your points, and think your logic is inconsistent in some cases. Only a few weeks ago you were talking about how this company would show a loss in q2 which I totally disagreed with, and they reported one of the highest if not the highest quarterly profit ever in the history of the company.
    Now you are singing the praises of $19.50 being a great price.
    It's bewildering to me how you value the company, but that's irrelevant. I have my own method of valuation which I have been using for years. I am very comfortable with it and will share my thoughts on this board to help out anyone willing to listen.
    I have been very satisfied with the performance of management and have agreed with almost everything they've done in the past 5 years.
    I raise the concern of being diluted by 70% between the last 2 offerings. I realize that to some people a greater number of shares outstanding is of little concern, but to me as a value investor, it is of great concern especially when done at questionable prices.
    I reiterate that the prices of both these offerings are undervalued.
    I wrote about the first offering last year and stated that I strongly disagreed with it. The price at the time was $10.75 and it was totally and utterly ridiculously underpriced. In the 8 months following, the stock price has done nothing go head up, and even hit prices of $25/$26. So how did that work out for us? In my opinion, horribly. Why in the world would I want FNHC to sell shares at $10.75? In short I wouldn't.
    I'm saying NOW, that I absolutely wouldn't want FNHC to sell shares at $19.50 which is what they just did.
    If anyone disagrees, I am open minded and willing to listen. All I ask is that the arguments make logical sense for a healthy discussion

    You can make your own judgements. I'm very comfortable with mine- $19.50 is NOT a good price.

  • Reply to

    Horrible Secondary offering

    by s12stocks Aug 1, 2014 9:54 AM
    s12stocks s12stocks Aug 4, 2014 11:35 AM Flag

    I question why "...they didn't have a choice". Where did you get this information.
    I also wonder why $19.50 - pretty much the lowest price possible is reasonable. I also wonder why "..they had to wait for earnings to come out". Are secondary offerings tied to earnings release dates?
    I also wonder why "...they really can't wait since we're in hurricane season". It is quite an assumption that a hurricane will send the price lower than $19.50. And by that logic, if you were so worried about hurricanes, why not do the offering in May, before hurricane season?
    I also wonder why "...if they waited a few more weeks they could've gotten $21 or $21.5/share". Again that is quite an assumption. Why not assume they could have gotten $24 or $26 or $30? Nobody has a crystal ball so I'd argue that any of those numbers are equally as likely, especially given that it's been only days after and the price has already risen above your hypothetical price of $21.50. . If they got $26, they'd have 500,000 fewer shares.. very significant.

    Timing the market is not a game I want management to be engaged in. However, I stand very strongly behind my statement that this is a horrible secondary offering. That's all I'm saying. The first offering was ridiculously undervalued and I was very strongly opposed to it when they announced it. This offering at $19.50 is also undervalued and whether due to bad luck or whatever, they got pretty much the worst price you could get. I feel very comfortable making that statement.
    As a result of these two offerings we've been diluted by 70%. Meaning you and I as shareholders own a 70% smaller piece of the pie than what we originally bought. Now, some of this may be a necessary evil, but it could've been done better. I don't like it when people take away my pie and then don't do it in an efficient way. We as shareholders should be very cognizant of this. In this case,we own a valuable asset and great care should be taken in that ownership

  • I know they didn't but, it's as if they waited for the price that brings maximum dilution. Why $19.50? That's a foolish price to sell at. I'm not happy about this price at all. As an owner of this stock since early 2010, this is the most unhappy I've been with this company. The only other time was the other stock offering, where we just basically gave away the shares for a tiny fraction of their value. Even when the company was losing money quarter after quarter, I had no problem with that.
    I'm not saying I'm selling, but this is the first time it's casually crossed my mind. A few more moves like this, and I seriously might.
    This stock offering at this price was a mistake.

  • Reply to

    Reinsurance contracts 2014-1015

    by ballen2123 Jul 6, 2014 9:08 PM
    s12stocks s12stocks Jul 17, 2014 1:51 AM Flag

    The majority if not all of it is due to new policies.

  • s12stocks s12stocks Jul 6, 2014 9:13 PM Flag

    re:#4 You read my post wrong. I don't believe your numbers are wrong. I believe that number is right.
    re#2: I don't understand your confusion. You answered your own question... policy count is up over 100%, that's the reason reinsurance is up over 100%. That's what's supposed to happen.
    re#3: See #2.
    re#1: if there is a .25% decrease it's totally fine with me.

  • s12stocks s12stocks Jul 6, 2014 12:20 PM Flag

    That's strange. I don't remember any talk about lowering rates. What did they say? And when did they say it?
    Reinsurance is up because the number of policies is up. They were not under insured last year.
    Your reinsurance calculation is not incorrect. As you stated they will pay $117M in reinsurance and there will be an expense of 1/4 of that each quarter.

  • s12stocks s12stocks Jul 6, 2014 4:20 AM Flag

    Let's consider this. The amount of protection they are buying is 2 or 3 times more than what they bought last year. We also know that they have been ramping up the amount policies each quarter for the past year/year and half by a lot. If you look at the amount of in force policies each quarter you can see why they have to buy more reinsurance. We know that reinsurance costs have not been going up as their have been no major disasters in the past several years and it seems the reinsurance market has become very competitive as a result. If you are concerned that we are just paying an increased price for reinsurance, there's currently no evidence supporting that. A more likely conclusion is that the rising reinsurance costs are correlated to the amount of new policies being written and currently on the books. We obviously have more exposure to hurricanes because we're insuring so many more homes.
    You raise a good point about the impact in the near future. There may be an impact to q3 that might cause the ratio between number of policies and reinsurance costs to skew, because of timing as we're writing more and more policies. Over time, everything should even out and the trend is definitely a significant upward trend as we move forward.

  • s12stocks s12stocks Jul 5, 2014 1:11 PM Flag

    This doesn't affect q2. And going forward, this is a good thing. I can't tell from reading your post if you see it as good or bad.

  • "Raymond James raises price target to $26 from $22. Rating outperform"
    Seems to be happening with greater frequency lately. After all this time, looks like we're getting the recognition we deserve. Still undervalued though, even at the raised price target, but headed in the right direction.

  • s12stocks s12stocks Jun 3, 2014 1:34 AM Flag

    I agree with ballen2123. The number of shares sold by the CEO is tiny in comparison to how many shares he has. Also, we're in the middle of a huge turnaround. Not too long ago the stock price was in the middle single digits and now it's over $20. It's totally natural to want to sell a few share after such a huge run up. And might I add, nobody has been selling in these past few years. Having said that, I still wonder why the stock made such a huge move in one day yesterday on very heavy volume. Absent of any news, I wouldn't worry about it. But any time something like this happens, you have to wonder a little bit about what's going on.
    The minor stock selling by insiders doesn't concern me, but I'm curious about the irregular stock price movement. One theory would be that some entity with a big long term position decided to take their profits here after making X times their money and exit. Who knows? If anyone has any idea, please let us know.
    As for earnings, I agree with ballen2123 again. I think $1+ is definitely do-able in Q2.

FNHC
23.96+0.59(+2.52%)Aug 22 4:00 PMEDT

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