Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Universal Insurance Holdings (NYSE: UVE ) are trading over 15% lower today after the insurer reported its first-quarter earnings last night.
So what: Universal Insurance reported earnings of $0.38 per share, a 31% year-over-year improvement, thanks to a 48% year-over-year increase in total policies, mainly outside of Florida. The company's net revenue was $74.3 million, representing growth of 10% year over year. The only estimate to be found regarding Universal Insurance's bottom line, however, had called for $0.51 in EPS.
Now what: Universal Insurance's shares had more than doubled over the past year prior to this report, and investors who bought shares as late as October are still holding onto a near double. This isn't unreasonable, as Universal's EPS has surged over the past two years, and its P/E is a rock-bottom 8.2 after today's drop. There's no fundamental reason why you should be afraid of this stock today -- this could be the buying opportunity you've been waiting for.
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