TSX:FFH - Post Discussion
Post by
retiredcf on Aug 28, 2023 7:48am
Good Summary
With a 65% total return over the past 12 months, can you explain what FFH have done differently than the rest of the companies in their sector?
FFH has experienced a tailwind from high interest rates in recent quarters, leading to a better yield in the investment portfolio, and is now trading at 1.0x times' Price/Book. Results have been good, and largely superior to peers: In the 2Q, FFH’s adjusted operating income grew 41%, driven by better-increased interest and dividend income, as well as strong underwriting profit. Better underwriting discipline, growth in premium written and especially the ROEs – one of the key metrics to evaluate financial companies which also shows improvement recently, averaging around 12%-15% range. Overall, the recent results showed a solid quarter with improvement across operating metrics. The stock was also cheap vs peers, trading at only 1.0x book value is a cheap valuation for such a quality insurance name. The other factor was that in 2022, investor sentinment shifted very strongly from 'growth' to 'value'. At only 5X earnings, investors saw in FFH a very cheap stock when other sectors were trading at 30X, or more. Essentially, FFH has gone from a 'hated' stock to a solid performer in an uncertain market, and the love has returned to it. The results have seen multiple broker upgrades over the past year which also contributed. (5iResearch)
Be the first to comment on this post