2024-02-11 08:00:00 ET
Summary
- Brown & Brown is an example of a recession-resistant investment we've held for many years.
- Since clients need to maintain insurance coverage even in business downturns, Brown & Brown's revenues tend to be very steady year by year.
- BRO is on track to produce close to $3 per share in earnings in 2023; as a result, its stock price has followed suit with strong performance as well.
The following segment was excerpted from this fund letter.
Brown & Brown ( BRO )
We first purchased this company in 2007 in our Mid Cap strategy.
As an insurance broker, it gets paid a commission on the premiums that its mostly small business clients pay. Since clients need to maintain insurance coverage even in business downturns, Brown & Brown's revenues tend to be very steady year by year. Yet, our investment underperformed for the seven years after our initial purchase, and it wasn't because we paid a high price - the stock traded at a moderate price to earnings (P/E) of 17x at the time. The culprit was profits....
Read the full article on Seeking Alpha
For further details see:
Madison Investments - Brown & Brown: A Recession-Resistant Investment