Yesterday, March 8, HCII reported it's 13th straight quarter of profitability with Q4 earnings of 27 cents per share versus anticipated earnings of 14 cents.
At the time of the initial post HCII was $8.08. It was $8.50 at today's opening and has been hovering around that mark most of the trading day. That equates to a 5.19% gain in 9 weeks (30% annualized).
Even though the stock is up notably, HCII is still paying a 4.8% dividend. During the conference call, management reiterated their intent to continue paying the dividend. Homeowners is a very unusual company. I cannot immediately think of anything else that compares when you consider that it is a growth stock, yet paying a huge yield too. Where else can you get both?
How much growth is left. I will not speculate. However, they have announced that they are expanding into Alabama while only having 1.5% of the Florida market. Seems to me that leaves quite a bit of potential.
Looking at some of the current numbers, the P/E is bout 10.5 and the P/S is a very low 0.83. Here is a real great number: zero. Zero as in no debt.
When I look at the stock today I still see a positive story, positive metrics, experienced conservative management and nothing but opportunity. If management continues to perform at such a high level you will be hearing a lot more about this small company in the future.
Sheldon Liber is an architect and the CEO of Chasing Value™ Asset Management, Inc., a small private investment company. He writes the columns Chasing Value™ and Serious Money and is on twitter: @ChasingValue. Disclosure: Mr. Liber currently owns shares of HCII.