Yesterday, Atlas Financial Holdings (NASDAQ:AFH) disclosed selected preliminary unaudited financial results for its Q4 and year-end – December 31, 2017. Today, the stock is down more than 40%. There’s no way that’s a coincidence. So, what did the financial report say?
Atlas Financial Holdings
Before looking at the results, let’s spend a moment reviewing Atlas Financial Holdings. Founded 9 years ago, Atlas Financial Holdings is an insurance company that focuses primarily on providing commercial automobile insurance policies. Under the leadership of CEO Scott Wollney, Atlas markets and distributes various products through an independent retail agent network.
In January, Atlas Financial Holdings reached a new 52-week high almost every week. For instance, on January 22, Atlas Financial Holdings was seen trading at $21.50 on volume of 13,027 shares at one point during the trading session. That would indicate to me that something was working within company walls. Today’s trading session says otherwise.
What Happened Today?
It all goes back to the financial results. On Thursday, Atlas Financial Holdings stated that book value was “reduced by reserve strengthening related to prior periods,” but they are confident that “results for more recent accident years are coming in as expected.” Wollney stated that Atlas made a commitment over the last year to both technology and analytics, and apparently, the company is starting to see positive results from this move. This commitment has reportedly helped to amplify “the expertise, data, and heritage we’ve always identified as valuable assets of our insurance subsidiaries.”
Important Numbers to Know:
– Gross Written Premium produced by Atlas for the full-year 2017 came in at $276.0 million. This is an increase of 22.6%.
– Atlas Financial Holdings forecasted its reported Loss and LAE ratio for the current accident year to come in between the range of 60% to 62%.
– This year, the company forecasts to write in excess of $300M in premiums.
– Based on a number of factors, it is reportedly reasonable to forecast that annual net EPS will surpass $2.00
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I suppose this news sits differently with each investor on the market. Either way, however, the stock is still doing miserably today. Currently, Atlas Financial Holdings is trading at $10.95. This puts the stock down $7.85, or 41.76%. This means it has hit a new 52-week low. So you could say the company is starting the month of March off much differently than how it ended January.
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