Is It Too Late to Buy Protective Insurance (PTVCB) Stock?

Alex Smith
·3 min read

Palm Valley Capital recently released its Q1 2021 Investor Letter, a copy of which you can download here. The fund posted a return of 3.60% for the quarter, underperforming its benchmark, the S&P Small Cap 600 Index which returned 18.23% in the same quarter. You should check out Palm Valley Capital's top 5 stock picks for investors to buy right now, which could be the biggest winners of 2021.

In the Q4 2020 Investor Letter, the fund highlighted a few stocks and Protective Insurance Corp (NASDAQ:PTVCB) is one of them. Protective Insurance Corp (NASDAQ:PTVCB) is a protection company. In the last three months, Protective Insurance Corp (NASDAQ:PTVCB) stock gained 55% and on April 8th it had a closing price of $23.01. Here is what the fund said:

"On February 16th, The Progressive Corporation announced the acquisition of Protective Insurance for a 63% premium to the 30-day average trading price. We owned Protective since the Fund’s inception and had been encouraged by gradual progress made on reducing the firm’s combined ratio, which in the fourth quarter finally broke below 100%, representing underwriting profitability. Industry conditions for commercial trucking insurers are very challenging because of nuclear jury awards. However, Protective and many of its peers have been aggressively raising premiums and stepping away from undesirable risks. The stock was at 0.6x tangible book value and had not responded positively to improving fundamentals or announcements indicating the possibility of strategic alternatives. We find it ironic that it took a takeover at a large premium for Protective’s stock to basically mimic what most other small caps have done anyway since the November election."

Pixabay/Public Domain

Our calculations showed that Protective Insurance Corp (NASDAQ:PTVCB) isn't ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 231.2% between 2015 and 2020, and outperformed the S&P 500 Index ETFs by more than 126 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds' poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Here you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

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Disclosure: None. This article is originally published at Insider Monkey.