American Coastal: Misunderstood, Disciplined Florida Condo Insurer

Anthony Perala of Punch & Associates presented his investment thesis on American Coastal Insurance (US: ACIC) at Best Ideas 2025.

Thesis summary:

American Coastal Insurance Corporation is the market leader in Florida’s commercial residential property insurance market, with a focus on condominiums specifically.

Management prides themselves on being disciplined operators, evidenced by their profitable track record since inception in 2007.

To recognize this impressive earnings quality isn’t easy, however. Historical results include American Coastal subsidizing their former parent company’s losses from the acquisition of American Coastal in 2017 until the parent went insolvent following Hurricane Ian in 2022.

American Coastal only became a standalone company in August 2023. The company trades at 7.5x 2024 earnings guidance, which includes impacts from recent hurricanes. This is an unwarranted discount to peers in our opinion given the difference in earnings quality as well as the potential for EPS growth to greater than $3 per share over the next 3-4 years.

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About the instructor:

Anthony Perala knew the right opportunity to pursue his passion for small and microcap equity investing was out there but it required a little patience. After seven years honing his research skills for two different fixed income asset managers, he joined Punch & Associates as a Research Analyst.

Anthony graduated from The College of St. Scholastica with a B.A. in Economics and Villanova University with a M.S. in Finance. He lives in Plymouth with his wife and two sons. He is very thankful he doesn’t have to juggle chasing around a toddler and studying for the CFA exams, having become a CFA® charterholder in 2018. He enjoys traveling and hiking with his family, reading, and baseball.