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TheStreet Open House

4 Buys (Yes, Buys) at 52-Week Highs

UIHC Chart

United Insurance Holdings (UIHC) operates as a property and casualty insurance holding company that sources, writes and services residential property and casualty insurance policies in Florida, Massachusetts, New Jersey, North Carolina, Rhode Island, South Carolina and Texas. United Insurance Holdings Corp. is based in St. Petersburg, Florida and trades an average of 235 million shares per day with a market cap of $337 million.

52 Week Range: $6.00 to $16.50

United Insurance is firing on all cylinders. Insiders are net stock buyers (no shares sold within the last six months), revenue per share is exploding higher, free cash flow is at the upper range in the last seven years, and net income during the latest reported quarter set a new record.

I like this stock and company for the above mentioned fundamental reasons and or its chart patterns. I like it so much that I wrote a Real Money Pro post with exact entry, profit target and stop loss prices. From a technical analysis perspective, the shares are trending higher on the monthly, weekly and daily chart. Trend followers love this type of pattern and will stick with it until a negative catalyst alters its path.

There's no reason why the stock can't continue higher for a year or more. Every time it makes a new 52-week high, more investors see it. That's how I found it, and once investors take a look under the hood and realize that insiders are participating in the rally because profits justify buying, the shares should continue higher.

The company also pays 16 cents annually in dividends for a 1.1% yield.

Wells Fargo recently initiated coverage rating United Insurance at outperform. The analyst didn't assign a price target that I read, but Zacks downgraded the stock in February, but raised the price target from $9.10 to $15.20.

I'm not sure how you raise a profit target by 50% while simultaneously lowering the rating, but I 'm willing to wager Zacks updates its rating soon. Even without a rating upgrade, if Zacks increases the price target it will have a bullish impact.

The last reported short interest is paltry and without reason to consider it a meaningful influence at only 1.9% of the average trading float. In other words, the smart money on Wall Street isn't betting against this one.

UIHC Net Income (Quarterly) Chart

 

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