IMHO the reasons being given on this forum for why the stock is cheap are not correct.
It is a company with great fundamentals, a model that is clearly appropriate and working well, highly capable and experienced management and staff, operating in a highly relevant niche in the market, and with a significant opportunity in terms of meeting the needs of a highly underinsured population in a unique, simple, transparent and appropriate way. And the company is clearly profitable.
I believe that any loss of trust is temporary and the result of an unfortunate chain of events relating to management's sale of escrowed shares followed shortly after by a results downgrade. Management has plenty of skin in the game, the CEO has voluntarily undertaken not to sell any further shares until Sept 2018, and I doubt whether any of the management would be selling at current prices. So the comments re escrow overhang are most likely not correct.
And the temporary issue with leads has been fixed, with sales now back on track.
I don't believe there's anything untrustworthy about management and that the opposite is true. They have a great track record over a very long period in the industry and would not be reinsured by Swiss Re (the world's largest or one of the largest?), unless they were completely trustworthy. The instos such as Forager, Bell Potter etc would have done thorough due diligence.
This is a longish term investment as stated in the prospectus, and as for any insurer I think it would be unreasonable to expect that growth will happen month on month, 6 months on 6 months, or perhaps even year on year. Especially when they are expanding into different channels/markets and there is a lead-in time to do so.
In spite of the comments made by others, I believe there is a deepish moat ..... I worked in the insurance industry for a number of years and believe that there aren't many people or insurance companies in Australia that could do what FIG are doing, achieving so much in a relatively short period of time.
I believe FIG will be a great investment over the longer term, especially at the current price....so much so that opportunities like this don't arise very often.
FIG Price at posting:
40.0¢ Sentiment: Buy Disclosure: Held
