Andrey Omelchak Trisura Group TSU-T PAST TOP PICK Apr 01, 2025

EPS of 65c matched estimates; Revenue of $772M was nicely ahead of estimates. Operating ROE was 19.6% vs 19% expected. Sales rose 16%. Net investment income rose 42%. Book value increased 26.3% to $14.56. Operating ratio was 87.5%. Scotia raised its priced target from $62 to $63. We would consider the results good. 
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Highly profitable with one of the highest combined ratios in Canada, and are very profitable in the U.S. Expects them to keep generating returns in the high-teens. Can keep growing for years to come. Trades at an attractive multiple. Could be taken out in the insurance space.

1-2 year performance has been very good. Specialized insurance can be very profitable. Capital appreciation very good - not paying dividends. However, volatility can be hard for some investors. Would recommend for long term investors (can be volatile). 

EPS of 68c missed estimates of 67c; Insurance revenue was $807.6M. Revenue rose 10.5%. ROE was 18.6%, higher than estimates (18.5%). Book value rose to $15.64 from $12.58. Debt to capital 11.6%, better than estimates (11.7%). The company noted strength in Trisura Specialty  and growing earnings from US programs, as well as higher net investment income. The stock is down on the 'miss', but all in we would consider the quarter OK. The stock is still up 20% YTD.
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(Note the short timeframe.)
Keeps delivering. Great management. Good organic growth rate. Focused on profitable growth. Very attractive multiple. Specialty insurer, with a high ROE.

We think TSU is one of the under-the-radar insurance names that possesses both a decent track record of maintaining healthy underwriting discipline and is well-managed. TSU retains most of its earnings for future growth - if the company can grow profitably by underwriting policies conservatively, we would not be surprised if TSU becomes a long-term compounder. The company is trading at 2.5x Price/Book, which we think is a fair valuation for an insurance company with healthy profit margins, and a consistent ROE above 15%.
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TSU is one of the few names that did not move much in 2024, despite decent operating results. TSU tends to move along with the insurance sector overall (especially P&C names). In addition, TSU is the type of compounder that can be flat for some time and then make a move all of a sudden that no one expects (given that the operating results continue to improve).

Although the share price has not moved much recently, TSU is continuing to build value for shareholders brick-by-brick through retained earnings and disciplined underwriting. We would be comfortable holding TSU for the long term here; we think the valuation is quite attractive given the growth and ROE profile of the business.
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Ties to Brookfield, high quality. From market darling to selloff on softer financials. Just below his ideal growth profile, and just above ideal valuation. Good company, well managed, but not his preference in non-bank financial sector. 
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Good pop, but now legging lower. Important support around $30, so don't add yet. Wait to see if it can hold that level; if it can, he'd be more comfortable adding. Other insurance names are quite strong, so a relative underperformer is a warning flag.