PIH
Their premiums were up 4.5 million y/y their expenses were up 2.3 million y/y. so essentially over a course of 4 quarters their growth has given them about and extra 550k pre tax approx a quarter. So essentially we should see them earn say $1.00-$1.10 or so barring no weather for the next 4 quarter starting q3 going foward. To me the stocks trades at the correct valuation.
Furthermore the funny thing about stocks like UVE they have a 35 million retention on a big storm we get the stocks panic, but the reason why they come right back is because people know it for what it is, it doesn't even wipe out 1 quarter of earnings and then see ya next year basically. A company like PIH and this is a major risk in my opinion they have a 10 million retention for the first hit, they will not even make 10 million barring good weather from q3 18 to q2 19. That 10 million retention can't go unnoticed while fnhc or uve get hit with a big storm it doesn't even take out 1 quarter, PIH get hit with a big storm they report losses for the year. Think about that, that is another factor that adds to the risk level. Their reinsurance terms, jumped 3.5 million increase from 17-18, but almost 10 million from 18 to 19. They didn't get great term, and furthermore their retention is too high, because it doesn't wipe out a quarter it wipes out more than year. To me PIH is not very attractive at this point and that reinsurance contract, makes the stock very unattractive because if they get hit with 1 bad storm goodbye profits see you next year, UVE and FNHC and other you can bake that into results and guess what these are still wildly profitable businesses over the course of a year. To me PIH reinsurance terms were not good, and the stock even with growth is basically fairly valued here in my opinion. All is just my opinion, and I could always be wrong though.
AI
