Today’s company is a small US-traded insurance holding company. The investment case is straightforward, so this writeup will be short.
A quick caveat: Despite a market cap >$100mn, with high insider ownership and a Pink Sheets listing, this remains an oddball stock best suited for tiny accounts. ADV this year has hovered around $10–15k, with liquidity showing up in erratic bursts. On some days, the stock doesn’t trade at all.
Why this thing is compelling boils down to the following points:
- 0.6x book, and the book value is likely materially understated.
- 14% CAGR in BVPS over the past decade (11% over the past five years).
- A conservatively financed insurer at 2.2x assets-to-equity. That leverage ratio is shrinking over time, even as BVPS has compounded at nearly mid-teens rates for a decade.
- Insiders see it as dirt cheap and are snapping up every share they can find for buybacks, with the company absorbing ~20% of the ADV while urging shareholders — both via the Chairman’s letter and the website — to reach out directly if they want to sell.
- For reasons I’ll detail below, the company looks poised for a sale, probably within the next five years. A takeout at my estimate of NAV five years out could deliver a return CAGR north of 25%. A rerating could pull those returns forward.
Let’s see what we’re dealing with…