Well, after watching this stock for several months now, I feel like it typically floats between $11-$17. I've seen it hit below $12 during one week, and I've seen it hit the upper $16's a few times. It tends to float and feel "most comfortable" around $13.50-$13.75.
After following it for months, here is what I have seen:
1) excellent growth potential
2) excellent management
3) earnings blowout quarter after quarter
4) some debt, but nothing to be concerned about.
5) low volume...the market basically ignores this stock, probably because it's a relatively new and unproven company (IPO'd just over a year ago).
6) They've announced a stock buyback
7) acquisitions (again, growth)
8) It often gets beat up with the other financial stocks, although there is very little reason that it should. When the mortgage crisis hit, AFSI got slammed along with the rest of them, although the company announced that it had almost no sub-prime exposure.
9) the valuation seems fair to me, although you can argue that it is too high or too low depending on what method you choose to valuate the stocks.
10) generally, the fundamentals are good.
Overall, the next time AFSI dips to the $11-$12 range, I'm loading the boat and going long. If the profits are there, and historically they have been, the market isn't going to keep ignoring this stock forever. Whatever the case, we're likely looking at a bounce when the buyback begins (and possible bounces on any rate cut announcements, congressional stimulus packages, etc).
Very little downside. High potential upside. In my opinion, one of the best kept secrets on the street.
Short term? - expect a bounce to $17 or so within a few months (?)
Long term? - excellent investment.
They market won't ignore a profitable, well-run company forever. When institutions get interested, we're going to see a jump.
That's my take, anyone else have any ideas?
