What: Shares of Universal Insurance Holdings (NYSE:UVE) popped 14% today after dropping more than 30% on Tuesday.
So what: Currently trading for about 2.6 times book value, Universal Insurance Holdings isn't exactly a cheap property and casualty insurer. Yesterday, at the Robin Hood conference for money managers, Anthony Bozza of Lakewood Capital Management described the company as one of his best short ideas.
Today's pop may be a continuation of a short rally that began after the market closed on Tuesday. As is often the case, stocks move quickly during and immediately after events like Robin Hood, as traders pile on to market movements. In the days that follow, it's not surprising to see a small recovery as the market digests new information.
Now what: Bozza's thesis centered on the idea that Universal Insurance gained market share as major insurance companies moved out of Florida and that management was untrustworthy, suggesting that the company doesn't pay claims as it should and that its "CEO has been arrested five times," according to Bozza. Other reports suggest that the arrests may have actually been the CEO's son, who has the same name.
Universal hasn't directly responded to Bozza's allegations to date, only putting out a brief press release describing its historical financial record, and suggesting that Bozza's presentation was built on "misleading" and "partial information designed to negatively affect" its share price.