Heritage Insurance

Ticker
$HRTG
Industry
Insurance
Type
Beaten Up
Rating
Not Rated
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Notes

3Q21 weather losses — Heritage looks like an interesting trade as the company is suffering from weather related losses at the moment (coastal P&C insurer).
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Buybacks — Jan 2022 — Announced $25m buyback authorization through 12/31/2023. This wold be ~14% of current market cap at $6.40 per share
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Earnings estimates — I’m using consistent premiums from 2021 to 2022, lower loss ratio (back to pre-2020 levels as % of GWP), and flattish PAC/SG&A costs... No buybacks assumed
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Financials and Valuation

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FY21 Valuation — At 0.8x FY21 book value of $12.34 per share = $10. This would be ~9x earnings at $1.10 in 2022 EPS. Both multiples are in-line with longer run averages.

Resources

May 2022 — Sold shares

Heritage is seeing continued losses and this option looks like it’s a long way from paying off. Sold all shares for a significant loss. Will continue to monitor from a distance to see if they make any progress on the turnaround.

March 2022 — FY21 review