The Panic-Proof Portfolio (Stockchase Research)American Coastal Insurance CorporationACICTOP PICKFeb 20, 2025

Our PAST TOP PICK with ACIC has triggered its stop at $11.50.  To remain disciplined, we recommend covering the position at this time.  When combined with our previous guidance, this will result in a net investment loss of 2%.  

We reiterate ACIC as a TOP PICK.  The company announced a special 5% dividend payable later this year -- indicating to us that cash flow is holding strong.  This is likely due to less than projected Florida coast storm damage this past season.  It trades at 8x earnings, under 2x book and supports a robust 29% ROE.  We recommend trailing up the stop (from $10.00) to $11.50, looking to achieve $14.00 -- upside potential of 16%.  Yield 0%

This Florida based insurance provider just reported record quarterly earnings, a 16% increase in net income, and growing cash reserves.  Now that the seasonal hurricane season is past, its smooth sailing -- and its negative beta to the market is noteworthy.  It trades at 8x earnings, 1.7x book and supports a robust 29% ROE.  It paid out a special $0.50 per share dividend in January 2025 and could likely do that again in the new year.  We recommend setting a stop-loss at $10, looking to achieve $14 -- upside potential of 19%.  Yield 0%     

Our PAST TOP PICK with ACIC has triggered its stop at $11.  To remain disciplined, we recommend covering the position at this time.