The Panic-Proof Portfolio (Stockchase Research)Mercury General CorpMCYTOP PICKApr 10, 2025

Our PAST TOP PICK with MCY has triggered its stop at $100.  To remain disciplined, we recommend covering the position at this time.  When combined with previous guidance, this will result in a net investment gain of 42%.  

We again reiterate MCY, with 6300 agents in 11 states providing personal and commercial insurance, as a TOP PICK.  Recently they announced they are working along with local agencies to develop fire hazard mitigation using AI in the markets they serve -- getting ahead of the hazards to reduce risk.  It trades at 10x earnings, 2.3x book and supports a robust 38% ROE.  We recommend trailing up the stop (from $98) to $100, looking to achieve $125 -- upside potential of 16%.  Yield 1.1%

Our PAST TOP PICK with MCY is progressing well.  To remain disciplined we recommend trailing up the stop (from $89) to $98 at this time.  

We reiterate MCY, a property and auto insurance provider with 6300 agents in 11 US states as a TOP PICK.  Recently reported earnings per share growth was 60% higher than analyst expectations, with premiums earned up 13% -- double the growth expected.  It trades at 9x earnings, 2.2x book and supports a robust ROE of 33%.  We continue to recommend a stop at $89, looking to achieve $120 -- upside potential of 17%.  Yield 1.3%

Our PAST TOP PICK with MCY is progressing well.  To remain disciplined, we recommend trailing up the stop (from $81) to $89 at this time.  

We reiterate MCY, a property and casualty insurance provider focused on California auto policies as a TOP PICK.  Recently released earnings showed growing cash reserves, while debt was reduced on the back of a 14% revenue boost and lower than expected claims.  It trades at 11x earnings, 2x book and supports a 20% ROE.  We continue to recommend a stop at $81, looking to achieve $110 — upside potential of 22%.  Yield 1.3%

Our PAST TOP PICK with MCY has achieved its target at $100.  To remain disciplined, we recommend covering half the position at this time and maintaining the stop at $81.  

Our PAST TOP PICK with MCY is progressing well.  To remain disciplined, we recommend trailing up the stop (from $74) to $81 at this time.  

We again reiterate MCY as a TOP PICK.  Recently reported earnings showed a 160% increase in profits, 13% increase in revenues, growing cash reserves, and debt reductions.  It trades at 2.2x book, 18x earnings and supports a 16% ROE.  We continue to recommend a tight stop at $74, looking to achieve $100 -- upside potential of 29%.  Yield 1.6%

Our PAST TOP PICK with MCY is progressing well.  To remain disciplined, we recommend trailing up the stop (from $65.50) to $74.00 at this time.  

MCY recently reported earnings growth of 14% over the year on revenue growth of 11%.  Catastrophic loss of reinsurance was down almost 90% from a year ago allowing cash reserves to grow aggressively.  It trades at 13x earnings, 2x book and supports a ROE of 21%.  We recommend trailing up the stop (from $59.50) to $65.50, looking to achieve $90.00 -- upside potential of 27%.  Yield 1.7%

We reiterate this auto insurance provider, operating primarily in California, as a TOP PICK.  It trades at 13x earnings, 2x book and supports a ROE of 16%.  We like that cash reserves are growing, while debt is retired.  We recommend trailing up the stop (from $54.00) to $59.50, looking to achieve $80.00 -- upside potential of 21%.   

We reiterate this insurance provider operating principally in California as a TOP PICK.  Cash reserves are growing, while debt is retired and increased recent insider buying doesn't hurt either.  It trades at 12x earnings, under 2x book and supports a ROE of 16%.  We recommend trailing up the stop (from $49) to $54, looking to achieve $80 -- upside potential of 26%.  Yield 2.0%

We reiterate MCY, a provider of auto insurance principally in California, as a TOP PICK.  We like that cash reserves continue to grow, while debt is retired.  It trades at 15x earnings, under 2x book and supports a 12% ROE.  Its dividend is backed by a payout ratio under 33% of cash flow.  We recommend trailing up the stop (from $44) to $49, looking to achieve $62 -- upside potential of 28%.  Yield 2.0%