Our first idea is a small insurance company that beat analysts’ estimates by eight cents last quarter and will split its stock on December 30. Our second idea is profit-taking on a previous recommendation.
Buy: Navigators Group (NAVG)
From 2 for 1 Stock Split Newsletter
Navigators Group (NAVG) is a nifty little insurance company operating out of Stamford Connecticut and specializing in marine coverage worldwide.
High scoring metrics include a low measure of volatility, growing returns on investments, steady growth in revenue, and reasonable PE and price-to-book ratios. When these numbers, and others, are compared to those of its peers, most do not appear exceptional. But taken together, they paint a picture of a very well run, steadily growing business.
There are a few negative factors to consider regarding this recommendation. This is a young company in the insurance world and it got into trouble a few years ago when it was fined $275,000 for providing insurance to foreign flagged vessels under sanction by the Treasury’s Office of Foreign Assets Control, including those of North Korea. The company has improved its compliance controls, has moved on, and this blot on its reputation does not appear to have been permanent.
While NAVG has a reasonable market cap of $1.7B, its stock is relatively thinly traded at about 50,000 shares a day. A limit order and patience are recommended when purchasing this stock.
Neil Macneale, 2 for 1 Stock Split Newsletter, www.2-for-1.com, 408-210-6881, December 2016