Hilary Kramer is pretty well known to most Gumshoe readers not just because her publisher, Investorplace, sends us an email promoting her services every couple days, but also because she gets herself on TV fairly often and has written a couple investing books (including one with her fellow newsletter scribe Louis Navellier) — and she was also a regular contributor to the PBS Nightly Business Report for a while (I think that’s actually produced by CNBC now, don’t know if she’s still involved).

But we know her mostly because she promises stock riches in the ads for her various newsletters — the “entry level” GameChangers letter that recommends growth stocks, and the pricier ($1,000 a year or so) Breakout Stocks Under $10 (used to be “under $5” … inflation, I guess) that she’s pitching today.

This time around her spiel promises three “Barn Burner” stocks — we’ll get to one of ’em for you today and I’ll follow up tomorrow with the others. Here’s a little taste:

“Barn Burner #1 — The Invisible Insurance Syndicate: This company is an insurance wholesaler that dominates every niche it enters. How?

“They eliminate their competition the way Al Capone used to: it takes them over.

“This company ‘influences’ them to surrender their turf. It ‘persuades’ them that they are better off in a different business.

“In other words, they’re on an acquisition tear. They’re devouring every kind of insurance company in sight.

“Not only does this give this company multiple streams of income from their takeover targets …

“It also provides them with enough diversity to weather any financial storm.”

So … almost every insurance agency that has seen growth has been an acquirer at one point or another, many large insurance companies were built over time by throwing a lot of small insurance companies into a blender, so we’re going to need a few other clues. So far, we know it’s probably under $10 and it’s in insurance.

Here’s a bit more:

“Took over premium finance company South Bay Acceptance Corporation

“Gobbled up Gulfco Life Insurance Company

“Hijacked Darby and Associates

“‘Persuaded’ Continental Car Club, Auto Knight Motor Club, and United Motor Club to ‘join,’ so they could offer expanded roadside services to their insurance portfolio

“Acquired Pacific Benefits Group to offer the first post-point-of-sales service in the insurance industry

“Absorbed eReinsure for their cutting-edge web platform for dominating the reinsurance risk-placement market…

“Organic growth” is good for any company. You know what I mean… growing a business by new marketing campaigns, hiring more sales people… stuff like that.

“But for the fast bucks, there’s nothing like taking over someone else’s turf. That’s instant cash-in-pocket.

“And this company’s been doing it right. They’ve got fantastic numbers. Their cash creating ability is over-the-top. And their debt is miniscule.

“Which means they’ve been smart. Every takeover has been well-planned to add to their resources, not deplete them.

“They’ve become masterminds at building through acquisition.

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“But they’ve got plans on the horizon that will make their previous turf wars look like kid’s stuff. So buy this company now, before their next takeover explodes their earnings 50% or more.”

Answers? sure, we’ve got answers — according to the Mighty, Mighty Thinkolator this is certainly: Fortegra Financial (FRF)

That’s not to say that the Thinkolator is sure they’re “doing it right” or that their “cash creating ability is over-the-top” … just that they’re certainly the stock Kramer is touting here.

The company is in the midst of a bit of a restructuring, having sold off its reinsurance/brokerage division to focus on payment protection, auto clubs and warranty coverage, the kind of stuff that typically has very low claims and high administrative costs and service fees attached. This is the company that will back and administer the extended warranty you might buy from a store, for example, or help an auto dealer offer a roadside assistance program that they know you aren’t ever going to actually use (sorry, a little cynicism seeping in there).

The shares are down at about $8 right now, and have been quite tepid ever since they went public just over three years ago — they were backed by Summit Partners, a private equity firm that took them public in December 2010 at about $11. That was just the first phase of the “exit”, however, Summit Partners still owns more than 60% of the shares so their long-term plans for the company will carry a lot of weight.

The big news from the company is that sale of their reinsurance platform to focus on their higher margin and higher growth businesses, though I don’t really know much about how those warranty/credit protection/auto club businesses operate or whether Fortegra is a strong force in those niches. The shares trade quite close to book value, which would be pretty nice for a niche insurance company in most circumstances but they also have large goodwill entries (thanks to the many acquisitions they’ve made) and their stock has been generally pretty weak and volatile ever since going public (though, to be fair, most of the fall in the shares happened within a few months of the IPO, when the stock got cut in half. Since then it has mostly bounced around between $7-9 or so.

Will the refocusing of the company bear fruit? Here’s what the CEO said in a press release about the divestment, which closed at the end of the year:

“Following the sale of our brokerage operations, we will be able to focus our full attention on our payment protection, warranty and service contract products. These products generate our highest margins and provide us a significant opportunity for future growth.

“We continue to have meaningful sales success in our credit insurance and other specialty insurance lines, including mobile device warranty and service contracts. We also fully expect our resources to be allocated to our auto products, including auto service contracts and roadside assistance.

“We intend to use the proceeds of the transaction to deleverage our balance sheet and provide more flexibility as the business grows.”

And, interestingly enough, I found that Hilary Kramer also publicly touted this stock on Fox Business last month — here’s what she said about them in that piece:

“Earnings have been disappointing in 2013 as the company digested two acquisitions, but will be helped by continued cost-cutting efforts and revamped marketing programs. Very encouraging was the recent sale of the company’s insurance brokerage segment for $83.5 million, yielding a solid price of 10X EV/EBITDA. The company will be able to use the proceeds to pay off the debt incurred from the acquisitions, which will free management to step up the pace of share buybacks going forward.

“EPS should be relatively flat this year at $0.83 a share versus $0.82 a share next year, and could fall back around to $0.78 a share next year to the sale of the insurance brokerage unit. However, this estimate does not take into account the use of the capital raised in the transaction. Beyond next year, FRF seems poised for steady growth and strong cash generation. At around 10X 2014 EPS estimates, the stock is a solid value. Keep in mind that the company is 63% owned by private equity firm Summit Partners, who wants to see value maximized beyond the $11.50 December 2010 IPO price.”

The company is basically focused on selling tack-on “value added” services to retailers and insurance companies, not direct to consumers — so their focus is on making the argument to their partners that they can “enhance revenue,” whether it’s the auto insurance company or car dealer who Fortegra can convince to offer their roadside assistance program as a bonus or for a small fee, or the wireless retailer who can increase the size of their sales ticket by adding an extended warranty to that new smartphone purchase.

So … it’s a hard business to figure out, being disassociated to some degree from the end consumer and subject to a lot of regulatory oversight. But you can argue that it’s a bit of a value stock, given the fact that they’ll pay off some debt after this sale and they’re trading for right around 10X earnings … and perhaps you can argue that they’re about to turn around the business as they focus on what they consider their higher-margin growth opportunities in credit protection, warranties, and car clubs. You can not, however, make much of an argument that it’s a real growth darling — and Hilary Kramer’s argument that it’s a “barn burner” seems to be pretty far outside the consensus.

Of course, making bets against consensus is where you get your best returns — but you also take some risks. This is a tiny company, with a market cap of just $150 million or so, and a massive controlling shareholder owns $100 million of the shares, so the trading float of shares is very small and often only $100,000 or so worth of shares trade in any given day. Go forth, research it to your heart’s content, and let us know if you agree that it’ll be a barn burner this year and post gains of at least 50% for you by March.

P.S. Don’t worry, I’ll be back with a look at the other two picks she’s touting later this week, an employment agency and a boutique clothing company that she also calls “Barn Burners” … we’ll see ….