UVE
Universal Insurance Holdings, Inc.
$37.42
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Moderate
·
Conviction
Undervalued
Trading 38.2% below fair value
You pay
$37.42
Bear
$56.13
Fair
$60.55
Bull
$60.55
Bear
$56.13
+50.0%
ROTCE 20.0% → 3.71x TBV
Fair
$60.55
+61.8%
ROTCE 25.0% → 4.00x TBV
Bull
$60.55
+61.8%
ROTCE 30.0% → 4.00x TBV
Key Value Driver
ROTCE (43.3%) vs. cost of equity (8.3%)
Implied Market Multiple
2.47x
Summary
With ROTCE of 43.3% vs. 8.3% cost of equity, fair P/TBV is 4.00x on $15.14 tangible book, implying $60.55 per share.
Warnings
Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.
Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.
Key Risks
- Book value quality matters as much as level — check loan loss reserves
- Interest rate sensitivity creates non-linear earnings surprises
- Insurance reserving is actuarial, not financial — errors emerge slowly