2 Companies Trading at <3x EV/FCF
PoW (#4) Searching in the East
Special edition this week: a pair trade on two mid-cap insurers ($500m–$1bn).
We’re adding a bit of macro context and, for the valuation section, we’ll use a three-tier framework tailored to insurance companies + we’ll also add a fourth lens, since part of the model hinges on Assets Under Management (AUM).
The three core pillars we’ll analyze are: cash flows, price-to-book, and the combined ratio.
A deeper dive than our usual quick pitches… worth the read.
Pick of the Week. A curated series of high-conviction research on companies currently under our microscope. We screen for specific dislocations where the market has mispriced the balance sheet or earnings power.
The Selection Criteria:
Asset Arbitrage: Trading at a discount to tangible liquidation value.
Backlog Disconnect: Future contracted revenue ignored by the market.
Hidden Margins: Structural profitability masked by temporary noise or CAPEX cycles.
The Structure:
The Business: A concise operational overview.
The Dislocation: The specific structural reason the opportunity exists.
The Valuation: A stress-tested snapshot including downside risks (”Red Flags”) and our proprietary score.
None of the following should be construed as investment advice. Please consult a financial advisor before making any investment decision. You will find a full disclaimer at the end of this post.
