Evaluating HCI Group (HCI) After Alden Global Capital’s Third-Quarter Stake Increase and Profit Growth

Alden Global Capital’s latest 13F shows a sizable third quarter add to HCI Group (HCI), a move that puts the insurer front and center in the fund’s portfolio and sharpens the market’s focus.

See our latest analysis for HCI Group.

That conviction is coming after a sharp pullback, with the share price at $170.17 following a 1 month share price return of minus 16.42 percent. Yet the year to date share price return of 48.66 percent and three year total shareholder return of 418.64 percent still point to powerful, longer term momentum rather than a story that has already run its course.

If Alden’s move has you thinking about what else might be setting up for strong multi year gains, this could be a good moment to explore fast growing stocks with high insider ownership.

With shares well off their recent highs but still boasting eye catching multi year returns, are investors being offered an overlooked discount on HCI’s growth story, or is the market already pricing in the next leg of expansion?

Most Popular Narrative: 26.5% Undervalued

With HCI Group last closing at $170.17 against a widely followed fair value of about $231.67, the narrative leans toward meaningful upside potential.

Discipline in underwriting and operational leverage from technology are lowering both claims frequency and operating expense ratios even as catastrophic risk increases industry wide, setting up HCI for higher normalized net margins and return on equity going forward.

Read the complete narrative.

Curious how rising margins, a climbing earnings base, and a lower future valuation multiple can still justify a higher price than today? The full narrative unpacks the profit blueprint behind that gap between current price and projected fair value.

Result: Fair Value of $231.67 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, that upside depends on Florida weather and reinsurance markets cooperating, as a major catastrophe or sustained cost spike could quickly erode those margin gains.

Find out about the key risks to this HCI Group narrative.

Build Your Own HCI Group Narrative

If this view does not fully reflect your own or you would rather rely on your own work, you can build a personalized narrative in minutes: Do it your way.

A great starting point for your HCI Group research is our analysis highlighting 5 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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