Key director adds to stake.
On Monday, August 5th, Sean Downes bought another 1,100 shares of Universal Insurance Holdings (UVE), where he has served as CEO in the past and now serves as director. The total cost of the additional shares came to just over $29,000, and increases his total holdings in the company to 1,431,833 shares.
Downes has been a buyer in shares in mid-June as well as back in May at higher prices.
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Universal develops, markets, and underwrites insurance with a focus on residential homeowner’s insurance and other related products. The company is one of the few firms that ensure for hurricane protection in Gulf states, but the company operates nationwide.
Action to take: With shares down 40 percent in the past year, and with the company trading at less than nine times forward earnings, there’s a good potential value. And the company’s balance sheet has sufficient cash to weather most events that could cause a high number of insurance claims.
We see some potential weakness in shares should a hurricane develop in the next few months, and that could create a buying opportunity. Typically, shares drop sharply as a named storm appears to be heading towards landfall, but will rally if the storm weakens or moves away from populated areas. So there’s a good chance of buying shares under $25 in the near future.