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Bear of the Day: United Insurance Holdings Corp. (UIHC)

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United Insurance Holdings Corp. (UIHC) is a property and casualty insurance holding company that’s seen its stock price fall 16% in the past 12 months, while the broader Zacks Insurance market climbed 35%. Alongside its underperformance, UIHC’s top-line outlook is tough.

The Short Story

United Insurance Holdings Corp is a holding company for United Property & Casualty Insurance Company and its affiliated companies. Overall, the firm is focused on personal and commercial residential property and casualty insurance in the U.S. and its sales have grown steadily over the years.

The Florida-based firm’s 2.6% revenue expansion in 2020 did, however, mark a significant slowdown compared to a string of double-digit growth that stretched back over a decade. Luckily, UIHC bounced back in the second half and ended the year with 15% revenue growth in Q4.

Looking ahead, Zacks estimates call for UIHC’s FY21 revenue to fall 13% to $703 million, with FY22 projected to slip another 9% lower. The company is projected to swing from an adjusted loss of -$2.98 a share last year to +$0.15 this year, with the bottom-line positivity set to continue next year.

That said, the company’s consensus earnings estimates for Q1 and fiscal 2021 have fallen 20% and 25%, respectively, in the past seven days. The stock also sports “F” grades for Value and Growth and a “D” for Momentum in our Style Scores system and its industry sits in the bottom 41% of our over 250 Zacks industries right now.

Bottom Line

United Insurance Holdings grabs a Zacks Rank #5 (Strong Sell) at the moment, based on its downward earnings trends. The nearby chart also showcases that UIHC’s tough showing in the past 12 months is part of a longer decline.

The company does pay a dividend and it’s trading for under $10 a share, which can be enticing to some investors. That said, any interested investors might want to wait for United Insurance Holdings to release its Q1 financial results on May 5 to see if the firm can turn things around and gauge Wall Street’s reaction.

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