Universal Insurance Holdings (UVE) – Just punched by “Irma” or potentially knocked out ?
Universal Insurance is an US-based P&C Insurance company which has been on my extended watch list for some time now. Why ? Well, the company always traded cheap (single digit P/E), was very profitable (~31% ROE for the last 9 years on average) and growing strongly year by year (400% over 9 years). So from the outside this looked like a cheap but highly profitable growth stock.
The main reason why I didn’t analyze the stock further is that Universal is a specialized homeowner insurance company which almost exclusively operates in Florida.
The company has a market cap of currently ~620 mn USD.
Not surprisingly Universal now is in a tough spot as “Irma” is creating havoc on Florida as I write this post. The stock price has dropped by around -30% by Friday:
value and opportunity 