Here’s What Makes Bernzott Capital Confident in HCI Group (HCI)

Bernzott Capital Advisors, an investment management firm, published its “US Small Cap Value Fund” first quarter 2022 investor letter – a copy of which can be downloaded here. The portfolio fell -4.6% (gross), modestly below the Russell 2000 Value’s decline of -2.4% and the Russell 2500 Value’s decline of -1.5% for the first quarter of 2022. Try to spend some time taking a look at the fund’s top 5 holdings to be informed about their best picks for 2022.

In its Q1 2022 investor letter, Bernzott Capital US Small Cap Value Fund mentioned HCI Group, Inc. (NYSE:HCI) and explained its insights for the company. Founded in 2006, HCI Group, Inc. (NYSE:HCI) is a Tampa, Florida-based insurance company with a 670.0 million market capitalization. HCI Group, Inc. (NYSE:HCI)  delivered a -20.78% return since the beginning of the year, while its 12-month returns are down by -10.71%. The stock closed at $65.61 per share on May 10, 2022. 

Here is what Bernzott Capital US Small Cap Value Fund has to say about HCI Group, Inc. (NYSE:HCI) in its Q1 2022 investor letter:

“HCI Group (NYSE:HCI): The company operates four divisions: insurance; insurance technology; reinsurance; and real estate. Homeowners Choice is a home and condo casualty underwriter primarily in Florida. TypTap is an insurance technology platform expanding nationally. Claddaugh is a reinsurance captive placing reinsurance for HCI. Greenleaf Capital a real estate company with over $100 million in assets. HCI intended to bring TypTap public in early 2021 but delayed the transaction as market conditions soured for IPOs. Short-term, event-driven holders exited the stock, which provided us with an attractive entry point. Delaying the IPO in no way changes HCI’s underlying value proposition and we remain confident that a long-term approach will garner an attractive return.”

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Our calculations show that HCI Group, Inc. (NYSE:HCI) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. HCI Group, Inc. (NYSE:HCI) was in 18 hedge fund portfolios at the end of the fourth quarter of 2021, compared to 21 funds in the previous quarter. HCI Group, Inc. (NYSE:HCI) delivered a -4.79% return in the past 3 months.

In October 2021, we also shared another hedge fund’s views on HCI Group, Inc. (NYSE:HCI) in 9 Stocks To Buy According To Carson Yost’s Yost Capital Management. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.

Disclosure: None. This article is originally published at Insider Monkey.