by Travis Johnson, Stock Gumshoe | March 12, 2021 5:26 pm
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Great info Travis. It one note regarding WRAP though. I can’t tell you from experience it wouldn’t play out well. Too much to put here but I will email you and let you know. Everyone else, you can aim for long game on them but I DEFINITELY would not put a lot into it.
CAN not Can’t
Sounds ominous!
There are a lot of challenges, many highlighted in that first LAPD report — puffy jackets, naked dudes, too close to a fence, bad aim. Still, the novelty of it works to some degree — the James Bond gadget effect, the mound bang, the laser light. Will be interesting to see how it shakes out. I’d surely rather be Wrapped than Tased.
thanks for the update on TIPT, Travis!
Thanks, Travis, for another informative Friday File. I think a taste of TIPT will be good for my IRA. I think it was a week ago, you mentioned you were starting a new portfolio where all picks would be held for at least 5 years. You mentioned SDGR was your first buy for it. Are you still going to set up this portfolio and will it be available to premium members? Thanks for all you do in support of StockGumshoe.
Yep, that stock is in there… I’ve noted it lower down on the real money portfolio page, but haven’t figured out how best to format that info yet — hopefully I’ll come up with something prettier before I find the second stock for that portfolio.
Thanks for the great post. Reg $MILE I am not sure I understand their MOAT. Pay per mile seems like one feature that can be enabled by traditional insurance companies. Am I wrong? Likely. Want to understand how though.
Anyone can do it, and some have tried before to a limited extent, but MILE has been building the data set to support it for ten years and is committed to the idea both as a tool and as a marketing strategy, and other insurers have not.
MILE Metromile quotes a monthly base rate (depending on coverage you want) + a per mile rate (which can differ by vehicle). I live in a state that Metromile covers, have two older vehicles, 2011 and 2013, am retired so don’t drive as much as used to, asked for a quote. Ends up being about 1/2 of premium with current carrier. Tempted to try, but wary of measuring device plug into OBD II frying my electrical system. My current auto carrier, one of the big 5, I asked a year ago and 6 months ago if they have a drive by mile coverage, but would only do one vehicle, not both; I asked again last week, and now they will do both vehicles!, turns out about a 15% savings….responding to competition!! I believe MILE premium is less $$ because they have little to zero marketing (I have not seen any), compared to as Travis says the massive $$ for marketing of the Big Insurance companies.
Steve. Thanks for the real life experience on MILE. I have seen their ad on Facebook. Not sure if they aggressively advertise like progressive. Good to have an insurer that targets people who drive less.
Travis have you looked at ROOT. I have started a basket including RPTZ, MILE, LMND and ROOT. I think there is probably one winner there and my guess is long term it isn’t LMND, too much expectation. People forget GEICO was a disruptor and Buffet bailed after a 50% increase before he came back to it years later. It also didn’t stop Geico from near bankruptcy. I feel like this basket has two or three bankruptcies and a winner in it.
Yes, Root is the one I find least appealing, but on that front the differences are fairly marginal. I agree that there’s a reasonable chance for a big winner or two to emerge, and that it’s hard to know at this point who it might be. The real question is which approach is better at acquiring customers at a reasonable price and keeping them on board, and whether any of them can compete with the massive marketing budgets of the incumbents.
Man, that was some crazy lucky timing for my most recent Tiptree buy — as of yesterday this stock, which has been in the red for longer than almost any other one I’ve owned recently, is now firmly in the green, and it’s all because of a move to unleash some of that “hidden value” in their Fortegra business.
I said above that “if the stock gets any attention for the hidden value of Fortegra it could do very well over time,” and yesterday they filed to list Fortegra as a separate company in an IPO. That could very easily awaken the market to the value in that little company — though it may not be dramatic and immediate, we’re talking about extended warranties and specialty insurance here, not flying cars or LiDAR, so we shouldn’t expect the market to instantly send the shares of newly public Fortegra soaring. I’ll be really curious to see what the going-public valuation for Fortegra is, and where it trades in the first week or two as a public company.
If they raise $100 million to fuel Fortegra’s growth through acquisitions and the push for more distribution, as seems to be the preliminary plan, Tiptree will presumably keep most or all of its position even as they dilute away some by letting Fortegra raise new equity cash (while Tiptree keeps voting control), but it will give the market a chance to put an independent valuation on Fortegra, and I’ll bet that will be substantially higher than the implied valuation it currently carries inside Tiptree. The stock is still well below what I consider a reasonable “buy” price (75% of book value, or about $8 a share).
I appreciate your math on tipt! Amazing….all I can say!!
Travis, thank you so much for all of your insight here. As a newish investor, you have helped me immeasurably. I’m wondering if you can offer any guidance or point me in the direction of a best practices formula for setting stop losses and for profit taking. I have a couple of flyers APHRIA, GAN, MARA that have done extremely well ( thank you!) where I have taken profit to 100% cost basis and just wondering now if I let them fly or continue to shave profit. Of course I understand that your strategy would vary depending on the stock but just wondering if there is a rough formula that you use to decide when to trigger a stop loss or take profit.
Trade Note:
A little shifting around in what I consider the “value” portion of my Real Money Portfolio today — with the crazy surge by Tiptree following their earnings and, more importantly, their filing to take their Fortegra insurance subsidiary public in an IPO to help it grow (and help investors see the value), I took a little bit off the table. Yes, that’s real value being recognized, and yes, Tiptree is still worth buying at a discount to book value, which itself probably understates the value of the Fortegra business and their shipping and mortgage businesses, but going from a 50% discount to book value to a 10% discount in three days is abrupt enough, particularly given the fact that Fortegra hasn’t formally gone public or gotten a price yet, that I want to capture a little bit of that gain. If the IPO is not embraced enthusiastically, the shares could easily dip back to a deeper discount again. I still consider it a buy below $8, and think it should work out long term so I will hold most of my shares, but that kind of surge for a slow-growth company in a few days is a gift, so I sold about 10% of my position at around $9 today.
And given the progress made by another “value” stock in my portfolio, Five Point Holdings (FPH), which reported this week and is right around my “buy up to” price ($7.50), I put those quick windfall proceeds from TIPT into FPH. I’ll share more in detail tomorrow, but I think there’s a good chance that Five Point is at a real inflection point this year as the long-promised acceleration of home lot sales at Valencia comes through and the financials begin to improve as their first development matures and begins to spit off some cash. They’ve got a 10-20 year pipeline to develop and sell 40,000 home lots in new communities in San Francisco and Southern California, and it trades at a substantial discount to what those lots should be worth over time. TIPT remains a substantially larger position for me about twice as large as my FPH position, but this week the pendulum swings a little bit.
I think you’ve just crashed it… 😀