21st Century Is Really Motoring in Florida
Since September 11, insurance rates have soared, especially in Florida, with its hurricane worries. But 21st Century Holding (TCHC ), which writes auto and homeowner's policies in Florida only, isn't grousing. Last year, it earned $4.5 million, or $1.52 a share -- way up from 2001's $150,000, or 5 cents a share. "It has developed an excellent model of insuring cars," says Todd Ault of hedge fund Ault Glazer, which owns 7% of the stock.
The core customers are high-risk drivers who are charged premium rates. And to reduce fraud, 21st Century sends its own adjusters to investigate claims, rather than outsourcing the work. In home insurance, it avoids coastal property to limit hurricane damages. It also owns a tax-preparation service. Now at 11 a share, 21st Century is trading at only 3.1 times Ault's 2003 earnings forecast of $3.50 a share. It has a 2.6% yearly dividend yield. Also a bull is Michael James, a partner at Kuekenhof Capital Management, which owns shares. He notes that its tax unit grew at 40% last year and continues its torrid pace. James, who expects 2003 earnings of $2.75 a share, sees the stock at 20 in a year.
Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.
By Gene G. Marcial