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Insiders Invest in National General Holdings

- By Kyle Ferguson

CEO Barry Karfunkel and Executive Vice President Robert Karfunkel purchased a combined 74,978 shares of National General Holdings Corp. (NGHC) on March 27 and March 28, according to SEC filings.

They paid an average price of $22.87 per share. Barry now owns 53,473 shares of the company following the transactions. Robert now owns 28,521 shares.


Headquartered in New York, National General Holdings is a specialty personal lines insurance holding company. The company and its subsidiaries provide personal and commercial automobile insurance, health insurance and other niche insurance products. It operates through two segments: Property and Casualty and Accident and Health.

National General Holdings has a market cap of $2.47 billion, an enterprise value of $3.44 billion, a price-earnings (P/E) ratio of 16.92, a price-book (P/B) ratio of 1.68, a price-sales (P/S) ratio of 0.71 and a dividend yield of 0.6%.

According to GuruFocus, the company has a 6 of 10 financial strength rating with a cash-debt ratio of 0.29 and an equity-asset ratio of 0.26. The company's Beneish M-Score of -2.28 suggests it is not a manipulator of its financial statements.

The company has a 7 of 10 profitability and growth rating. It has an operating margin of 5.92%, a net margin of 4.85%, a return on assets (ROA) of 2.69%, a return on equity (ROA) of 8.61% and a three-year revenue growth rate of 41%.

Over the past five years, the company has averaged strong growth in multiple categories of its financial metrics.

The company has gained 23.90% in revenue growth, 25.40% in EBITDA growth, 22.60% in operating income growth, 18.90% in EPS without NRI growth and 22.80% book value growth.

The company's dividend yield is approaching its five-year high of 0.64%.

The company's P/S ratio is approaching its five-year low of 0.65.

Gurus David Dreman (Trades, Portfolio) and Scott Black (Trades, Portfolio) both added to their stake in National General Holdings during the fourth quarter. Since then, the stock price has gained an estimated 2%.

According to the Peter Lynch chart below, National General Holdings is trading below its intrinsic value.

Disclosure: Author does not own any shares of this company.

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This article first appeared on GuruFocus.