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IPCC, FPIC, AFSI, GBLI, HALL, OB, Insurance - Property Casualty Stocks Overvalued

  //stocks-investing.news-articles.net/content/201 .. surance-property-casualty-stocks-overvalued.html
  Published in Stocks and Investing on Tuesday, August 30th 2011 at 6:41 GMT by WOPRAI

August 30, 2011/ M2 PRESSWIRE / BUYINS.NET / http://www.squeezetrigger.com is monitoring the Insurance - Property Casualty sector and these stocks are the most undervalued as of today. INFINITY PROPERTY & CASUALTY (NASDAQ:IPCC), FPIC INSURANCE GROUP INC (NASDAQ:FPIC), AMTRUST FINANCIAL SERVICES (NASDAQ:AFSI), GLOBAL INDEMNITY PLC (OTC:GBLI), HALLMARK FINL SERVICES INC (NASDAQ:HALL), ONEBEACON INSURANCE GROUP-A (NYSE:OB) are all expected to go Down as they are Overvalued according to industry standard valuation metrics. The valuation model employs a three-factor approach to stock valuation using fundamental variables--the company's trailing 12-month Earnings-Per-Share (EPS), the analyst consensus estimate of the company's forecasted 12-month EPS, and the 30-year Treasury yield--to create a highly accurate reflection of a company's fair value.

The chart below displays the projected Fair Value and Valuation discount/premium of the most undervalued stocks in the highlighted industry group:

     Symbol     Company Name                        Last Close     Fair Value     Valuation                   Industry               
     IPCC       INFINITY PROPERTY & CASUALTY        50.93          47.37          7.50% Overvalued            Insurance - Property Casualty
     FPIC       FPIC INSURANCE GROUP INC            41.87          30.71          36.30% Overvalued           Insurance - Property Casualty
     AFSI       AMTRUST FINANCIAL SERVICES          23.66          15.42          53.40% Overvalued           Insurance - Property Casualty
     GBLI       GLOBAL INDEMNITY PLC                18.64          15.98          16.60% Overvalued           Insurance - Property Casualty
     HALL       HALLMARK FINL SERVICES INC          7.25           6.81           6.50% Overvalued            Insurance - Property Casualty
     OB         ONEBEACON INSURANCE GROUP-A         14.14          13.89          1.80% Overvalued            Insurance - Property Casualty

Here are some of the variables that are utilized when calculating the Fair Market Valuation of a stock: Long-run EPS growth rate, Duration of Business-growth-cycle, Volatility of EPS growth rate, Systematic or beta risk of the firm, Correlation between the firm's EPS and the interest rate environment, EPS growth volatility, Dividend payout ratio, Buffer earnings, Interest rate related criteria: Interest rate (30 year yield) long-run level, Duration of interest rate cycle, Interest rate volatility. The Fair Market Valuation uses 12-month historic and forecasted EPS values and the current 30-year treasury yield as primary determinants. When calculating risk/return values such as the Sharpe ratio, the historic periods used are five years.

Some expected results of the Valuation Model are: the valuation of a stock increases in a declining interest rate environment. Increasing current and/or projected EPS will produce a higher Valuation. While long-term EPS growth would produce a corresponding long-term Valuation increase, concomitant long-term interest rate increases would offset EPS growth and depress the Valuation. The shorter a company's own business cycle, the higher its stock Valuation will be.

INFINITY PROPERTY & CASUALTY (NASDAQ:IPCC) - Infinity Property and Casualty Corporation, through its subsidiaries, provides personal automobile insurance with a concentration on nonstandard auto insurance in the United States. Its products include personal automobile insurance for individuals, commercial vehicle insurance for businesses, and classic collector insurance for individuals with classic or antique automobiles. The companys products provide insurance coverage for liability to others for bodily injury and property damage, and for physical damage to an insureds vehicle from collision and various other perils. It distributes its products primarily through a network of independent agencies and brokers, as well as through contingent commission arrangements. The company was founded in 2002 and is headquartered in Birmingham, Alabama.

FPIC INSURANCE GROUP INC (NASDAQ:FPIC) - FPIC Insurance Group, Inc., through its subsidiaries, operates as an insurance carrier in the medical professional liability insurance sector of the property and casualty insurance industry in Florida. Its insurance products provides protection for physicians, dentists, and other healthcare providers against losses arising from professional liability claims and the related defense costs for injuries alleged to have been caused by medical error or malpractice. The company also provides claims and risk management services. It markets its products through a network of independent agents in the United States. The company was founded in 1975 and is headquartered in Jacksonville, Florida.

AMTRUST FINANCIAL SERVICES (NASDAQ:AFSI) - AmTrust Financial Services, Inc., through its subsidiaries, operates as a multinational specialty property and casualty insurance company in the United States and internationally. The company operates in three segments: Small Commercial Business, Specialty Risk and Extended Warranty, and Specialty Middle Market Business. The Small Commercial Business segment provides workers compensation insurance and an array of commercial package products, including commercial property, general liability, inland marine, automobile, workers compensation, umbrella, and farm and ranch owners coverage to small businesses, such as restaurants, retail stores and strip malls, professional offices, owner or contractor of building management-operations, private schools, business traveler hotels/motels, light manufacturing, small grocery and specialty food stores, light contracting, distributors, and laundry/dry cleaners. The Specialty Risk and Extended Warranty segment serves manufacturers, service providers, retailers, and third party warranty administrators that provide coverage for accidental damage, mechanical breakdown, and related risks for consumer and commercial goods. This segment also provides coverage for products, such as personal computers, consumer electronics, consumer appliances, automobiles, cellular telephones, furniture, heavy equipment, homeowners latent defects warranty, hand tools, credit payment protection, gap insurance, commercial and residential properties, and legal expenses. The Specialty Middle Market Business segment underwrites workers compensation, package products, general liability, commercial auto liability, and other specialty commercial property and casualty insurance for retail, wholesale, service operations, artisan contracting, trucking, light and medium manufacturing, and habitational markets. The company sells its products through a network of independent wholesale agents, brokers, and retail agents. The company is based in New York, New York.

GLOBAL INDEMNITY PLC (OTC:GBLI) - Global Indemnity plc, through its subsidiaries, provides admitted and non admitted specialty property and casualty insurance products worldwide. The company offers workers compensation, property, general liability, marine, professional lines, and commercial automobile insurance products through a network of wholesale general agents, program administrators, and wholesale brokers. It also operates as a treaty and facultative reinsurer of excess and surplus lines, and specialty property and casualty insurance. The company is based in Dublin, Ireland.

HALLMARK FINL SERVICES INC (NASDAQ:HALL) - Hallmark Financial Services, Inc. focuses on marketing, distributing, underwriting, and servicing property/casualty insurance products. The company provides standard commercial insurance, specialty commercial insurance, and personal insurance for businesses and individuals in the United States. Its standard commercial insurance products include commercial automobile, general liability, umbrella, commercial property, commercial multi-peril, and business owners insurance products. The companys specialty commercial insurance products comprise commercial automobile, general liability, and commercial property insurance products; aircraft insurance and airport liability insurance; and commercial umbrella and excess liability insurance. It also provides personal automobile insurance products, including personal automobile liability and personal automobile physical damage, low value dwelling/homeowners, renters, and motorcycle. Hallmark Financial Services markets its property/casualty insurance products through independent general agents, retail agents, and specialty brokers. The company was founded in 1987 and is headquartered in Fort Worth, Texas.

ONEBEACON INSURANCE GROUP-A (NYSE:OB) - OneBeacon Insurance Group, Ltd., through its subsidiaries, provides specialty insurance products and services in the United States. The companys businesses include OneBeacon Professional Insurance, which provides professional liability, management liability, health-care related liability, excess insurance and HMO reinsurance, and errors and omissions liability; International Marine Underwriters that offers marine insurance covering physical damage or loss and general liability for cargo and commercial hull; and OneBeacon Entertainment, which provides insurance for motion pictures, television, sports teams, and venues. Its businesses also comprise Specialty Accident and Health for accident insurance principally to employer groups, associations, and affinity groups; OneBeacon Government Risks for property and casualty insurance products to government entities; OneBeacon Energy Group that provides insurance for traditional upstream and midstream oil and gas production, storage, and distribution companies; and A.W.G. Dewar for tuition reimbursement insurance. In addition, the companys businesses include insurance for collector cars and boats through Hagerty Insurance Agency; OneBeacon Technology Insurance for hardware manufacturers, software companies, and telecommunications service providers; OneBeacon Financial Services that provide property and general liability protection for financial services companies; OneBeacon Specialty Property, which offers protection against certain damages; Property and Inland Marine insurance; OneBeacon Excess and Surplus Lines; and AutoOne. It offers its products through a network of independent agents, regional and national brokers, and wholesalers. The company was founded in 1831 and is headquartered in Minnetonka, Minnesota. OneBeacon Insurance Group, Ltd. is a subsidiary of White Mountains Insurance Group, Ltd.

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