UIHC acquisition
Pretty neutral on this one. According to the PR the purchase price is about 1.4x book, probably a roughly fair price for a 100 year old insurer, and it's all cash. I get that they are expanding aggressively, but I would rather see them buy back their own stock at 1.25x book.
Shouldn't affect Q3 which in my estimation should be good. I don't know if anyone noticed, but in the Q&A of the last CC they said as of Aug 3rd their cat losses for Q3 were in line with reserves. So it seems likely they may not have a large charge against earnings like they did in the last 2 q's. Remember that the losses in the last 2 q's were due to winter storms in the NE (snowfall record) and the rain this spring, specifically Texas (80% of the Q2 cat loss - nationwide May rain total was also a record). Also, they had "very elevated losses" in their Florida operation that was cleared up part way through Q2. I think if we see EPS in the .4s with 20+% growth the stock should at least get a pop. Hopefully by November the market improves. I'm holding off on purchases to see where we go this October.
GL all
Note: this post is not investment advice - do your own research
