Stocks

SeaBright Insurance Holdings, Inc. (SEAB)

This Month’s Stock:

Seabright Insurance Holdings, Inc. | (SEAB) | http://www.sbic.com/

In a Nutshell:

SeaBright is a niche insurance company. They focus on employers with complex workers’ compensation exposures, and provide coverage under multiple state and federal acts, applicable common law or negotiated agreements. SeaBright also provides traditional state act coverage in select markets. Their main target customers are employers with complex coverage needs, such as maritime employers whose employees work over land, shore and navigable waters. However, SeaBright also sells coverage to employers that are party to collectively bargained workers’ compensation agreements with trade unions (ADR programs). In 2006, SeaBright received roughly 25% of its premiums from employers who participate in ADR programs. The company is licensed in the following states:

The Numbers:

Sales grew by almost 100% from $87M in 2004 to $172 in 2005. Sales increased another 20% to $206M from 2005 to 2006. Expected growth for this year is 17%.

The net income per employee of $212,000 is significantly higher than the industry average of $166,000

Enterprise Value: $360M
Free Cash Flow: $120M
Estimated Growth (5 years): 15.0%
Return on Equity: 15.5%

P/E Ratio: 10.14%. It’s about on par with the industry average of 11.69%

Insider Ownership: 11%. It’s not as high as we would like to be, but it’s not too low either

Income Statement | Balance Sheet | Cash Flow 

Interesting Facts:

- John G. Pascaletto (Chairman, President & CEO) and Joseph S. De Vita (CFO & Senior Vice President) purchased a net of 8,500 shares as recently as August.
- Over the past two years, quarterly earnings reports were consistently higher than analysts’ consensus forecast by 12.5% to 27%.

Noteworthy Competitor:

Amerisafe, Inc. (AMSF)

Rate this stock (SEAB) and add your comments:

(13 votes, average: 4.92 out of 5)

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The author of this post does not own shares of either SEAB or AMSF.