What: Shares of Universal Insurance Holdings (UVE 1.12%) dropped by more than 30% today following a presentation by fund manager Anthony Bozza, who identified the company as a good short candidate at the Robin Hood conference of money managers. Shares regained about 7% in after-hours trading.
So what: The annual Robin Hood conference is a meeting where several of the world's best investors share their very best picks to an audience of hundreds of people who pay to attend. Often, companies highlighted in presentations start moving just as a presenter begins to speak.
That was the case today. Anthony Bozza of Lakewood Capital Management presented Universal Insurance Holdings as one of his best short ideas. Though details are scarce -- the full presentation and thesis will likely emerge with time -- investing website ValueWalk tweeted some of the major points of his thesis.
The publication noted that Bozza said big national insurers were cutting back in Universal Insurance's core market (Florida), and that this lead to Universal Insurance taking additional market share. The view may be that Universal is underpricing policies, that shrinking competition is temporary, or both.
In addition, ValueWalk suggested on Twitter that Bozza said Universal Insurance isn't paying claims as it should be. As a further point, Bozza was quoted as saying that Universal Insurance's "CEO has been arrested five times."
Universal Insurance Holdings issued a short press release in response, highlighting its financial performance, and calling Lakewood's commentary "misleading" and containing "partial information designed to negatively affect" its stock price.
Now what: With details scarce, and the full presentation available only to those willing to pay $7,500 per seat, it will likely be a few days before the full thesis makes its way to the public. All that can be known now is that Anthony Bozza of Lakewood seems to see the company as a compelling stock to short, and the market seems to agree -- at least for today.
