Flemsnopes, nice board, I brought in the 20's, and then sold all my shares in the 50's. This week I brought a small trading position at .55, because I felt it might move again, I'm really hoping I was wrong, and it moves into the upper 30's, low 40's so I really can add some more share. Allright enough of my trading experiance on UVIH.ob, and off to some DD.
Rapid Growth- As you can see a table of there revenues for the first three quarters are provided below. That revenue are really picking up, and I would predict this trend to continue in the future as well.
Q1: 2,131,635
Q2: 5,690,162
Q3: 7,187,831
Competition-Fortunetly for UVIH.ob, there aren't many players in the markets, because a lot of insurance companies, stay clear of florida, because it is deemed to be a market you can't make money in. So they will be able to raise there premiums, without losing many customers in my opinion over time.
Reinsurrance Strategy: They use reinsurance, like any insurance company to mitigate risk. In q3, net of reinsurance the were on the hook for 1.8 million due to hurricances, and they still produced .08. In q4, barring another hurricane hitting the only thing they are on the hook for is Wilma, which is around 1.35 million in losses in hurricanes net of reinsurance. The threat here is obviously there reinsurance rates are going to climb rather significantly over the next couple of years, but maybe they will be able to pass some or all of that to the consumer due to possible increased premiums pricing.
Balance Sheet: The balance sheet is very solid, with cash of over 37 million, and that currently works out to $1.09 in cash. It is important to note, that there balance sheet has around 7 million in equity, which works out to approxmately .21 per share.
Hurricanes: Unfortunetly, the increased # of hurricanes, as a trend make the whole insurance group less attractive, in my humble opinion.
Valuation- I believe the company will start putting up .12-.15, a quarter over the next three quarters. Insurance companies typically get low pe's, and considering the risk they are taking I wouldn't expect much more then a 5 pe, for a company that could do .50 during the course of a year. So the stock is still very cheap, but remember it will stay cheap, because of the type of company it is.
Income Taxes- In a couple of quarters, as they continue to earn big profits, can't see why not we are just about out of hurricane season for another 6-7 months. They will start having to pay taxes. This one I'm not sure on, exactly when, but we know they will be paying taxes soon enough.
Remember there are some warrants involved too here, so # of shares are going higher.
Conclusion: The stock is still undervalued considering all the risks and the industry, so I expect it to go higher over the next 6 months.
Hope This Helps.
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