Investment Thesis
I believe that investors would benefit from initiating a position in this non-standard auto insurer operating in several US states (southwest/east) due to the following points;
- The operations are strong and are generating a substantial amount of cash flow that not only justifies the current premium to tangible book, but also points to a clear upside. In just 2016 they generated $15 million of cash from operations or roughly 63% of the current premium to tangible book ($24 million). A significant part of that cash flow was used to pay a dividend worth