Amtrust Financial Services, Inc. (NASDAQ:AFSI)

I think its best this way. I hope I can get money by this.

5-year growth low valuation of $57.34 / share. That's over 109% from current price of $27.41 / share. Good past 52wk performance, and pays dividends.

With solid growth and 59% held by insiders, why not.

50 day avg > 200 day avg... low P/E, positive yield

Impressive growth in a steady industry.

PE ~8, PB a smidge over 1, attractive ROE.

Passing all kinds of growth & value screens; small company flying under the radar of most funds/analysts; steady, reliable growth in price + decent dividends; looks good as is, or could be potential acquisition by larger company (also good).

Top Reasons Why I Bought AmTrust Financial Services (AFSI) Last Week:
1) Solid Growth (Revenue/Owner Earnings) since 2003
2) The CEO owns 9.9% of the company
3) The ROE has been stable around 20% since 2005
4) Profit margins have been stable (around 12-16%) since 2005
5) They pay a dividend; it's small but increasing (since at least 2006), and is still a small, stable fraction (~15%) of owner earnings
6) The price is right: At 146M in owner earnings (2010), based on a 8% discount rate, the intrinsic value of the company is 1.8B; It's current market cap is roughly 1.3B right now. If you assume just 3% growth in owner earnings (forever), it's valuation would be 2.8B. For the last 5+ years, this company has significantly higher growth in owner earnings
7) It's an easy to understand business (workers comp insurance, etc.), it actually makes money on it's insurance business (premiums larger than payout ratio and expense ratio combined...don't remember the exact %, but seemed quite reasonable for a number of years), it's not capital intensive, and the long term prospects seem reasonable. (I doubt workers comp insurance, or insurance in general, is going away in the next 5, 10, 20, or 50 years.)

Slight concerns I have:
1) The balance sheet looks fine, but not amazing. (For comparison, RLI looks a bit healthier to me.)

Note: I calculate growth and ROE based on 'Owner Earnings' which I calculate as OE = Earnings + Depreciation - Capital Expenses.

FULL DISCLOSURE:
I own shares of AFSI and RLI.

AFSI does not offer the sex appeal of most of the stocks you see on TV or see a lot on these boards. But that is ok; I will take a page from Warren Buffet and Peter Lynch when they say boring is profitable.

I like a stock that can drive in low gear for an extended period of time without getting notice from Wall Street, and will not make the headlines at CNBC.

AFSI is a company that offers worker’s compensation for small businesses and also sell extend service and warranty coverage’s. AFSI stays away from the big boys and management is pretty conservative all this equals to profitability.
AFSI went public in 2006 with a 300 million book value; today the company book value is over $700 million. The company has a return on equity over 20% (to me that is sexy enough).

Presently AFSI only operates in the U.S and Europe so plenty of room to expand. The stock price should continue to go higher as the book value continues to increase. They presently offer a 1.64% dividend yield.

low PEG, strong price uptrend

strong peripheral areas of insurance industry

Forward P/E under 7. Analyst increase estimates going forward. Institutions accumulating shares.

located in specialty property & casualty insurance, this company has consistently grown sales and earnings over the last 5 yrs.sales gr. at 5 yr avg of 37% and earnings growth at 70% avg.
they also pay a dividend that is growing over 25% a year, and they have over 5$ per share in cash.
Couple this with a 8.3 p/e and you see that this could be one to own for a long time

The P/E is too low compared to it's peers. Room to grow, even though the debt is a bit of a concern, debt/equity ~ 80%.

they service a market segment that larger companies do not seem to have much interest in

This insurance company has an impressive valuation. Trailing P/E=8, Forward P/E=7, P/S=1.1, P/B=1.5. It has reasonable growth prospect with PEG=0.8. Return on Assets/Equity=3/22. Debt is a bit of a problem with Debt/Equity=80%. However, its forward dividend of 1.8% isn't a problem as the Payout ratio=13%. This company has momentum in its favor and very low downside risk.

Good stats and two year chart.

Well managed company with excellent growth potential.

This is just a beautifully run business in the very likeable insurance industry. Low combined ratio, shareholderfocused management with huge stake in the company. Count me in.

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