$FACO

Auto insurance underwriter.

Thesis:

• A trade based on valuation <1x tangible book value. 1-1.5x is standard.
• Also screening poorly vs earnings growth. There was an asset sale so it appears to be down to 0.21 earnings on the quarter from 1.60. If you take out the sale it would be flat 0.21. However, given you no longer have certain assets, this means the remaining earnings potential grew to fill that gap.
• ~0.80 earnings on the year puts it around 4.2x PE. Simply way too cheap.

Target: Sell at Tangible book value once it hits 1x. Approx 30% upside. Will need to monitor and review quarterly earnings to determine when this is. Easy button would be to sell when position is up 20%.

Purchase, 1 unit trade.