Insider Invests in Heritage Insurance Holdings

GuruFocus.com

- By Jennifer Chiou

Bruce Lucas (Insider Trades), CEO and chairman of Heritage Insurance Holdings Inc. (HRTG), bought 16,000 shares of the company on March 20. The average price per share was $12.57, for a total transaction of $201,120.

Heritage Insurance Holdings is a property and casualty insurance holding company with two subsidiaries, Heritage Property & Casualty Insurance Co. and Zephyr Insurance Co. The two subsidiaries together write over $600 million personal and commercial premiums. Heritage Insurance Holdings has a market cap of $367.89 million.


The number and volume of Heritage insider trades greatly varies from year to year. There were five insider purchases totaling 315,800 shares in 2014, which contrasts to the 67 insider sells totaling 1,723,124 shares in the following year. In 2016, there were more shares purchased than sold by insiders, 81,352 buys versus 17,500 sells. Lucas' aforementioned transaction is the sole insider trade in 2017 to date. It is not, however, his only transaction with the company. Since 2014, Lucas has acquired 122,600 shares in three transactions and sold 850,000 shares in 10 transactions. He currently holds around 1.4 million shares total. For more information about insider trades with Heritage, click here.

For the quarter ended Dec. 31, 2016, the company reported total revenue of $102.806 million, up from $101.332 million in the fourth quarter of 2015. Total expenses also increased when comparing the fourth quarter of 2016 to the fourth quarter of 2015. The increase may be largely due to the doubling of losses and loss adjustment expenses in the fourth quarter or 2016. Total net income decreased from $17.242 million, or 66 cents per share, in the fourth quarter of 2015 to -$11.989 million, or negative nine cents per share, in the corresponding quarter of 2016.

Lucas commented that "2016 was a challenging year for the company," in part due to "record tornadoes, two hurricanes and significantly increased loss reserves" in response to the current claims environment in Florida, where the company is based.

The company's annual revenue and net income have followed an increasing trendline since 2013. For more Heritage Insurance financial statistics, click here.

On March 15, the company announced the filing of a pre-effective amendment to its shelf registration statement with the SEC. The statement will allow the company leeway in financing future business opportunities with timely and cost-effective access to capital markets. Lucas commented the statement "is a prudent, proactive move to support [the company's] future growth objectives."

In the fourth quarter of 2016, Chuck Royce (Trades, Portfolio) and Paul Tudor Jones (Trades, Portfolio) both increased their stake in the company while Jim Simons (Trades, Portfolio) reduced his holding. Royce and Jones purchased 241,000 and 2,140 shares of the company for an average price of $13.92 per share, effectively increasing their holdings by 82.39% and 10.37%. Simons reduced his stake by 45.27%, selling 107,700 shares of the company for an average price of $13.92 per share. For more information about guru transactions with Heritage Insurance, click here.

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This article first appeared on GuruFocus.