Safety Insurance Group: Post Earnings Sell-Off Overdone

Safety Insurance Group Inc. (SAFT) is a provider of private passenger automobile insurance in Massachusetts and offers a portfolio of property and casualty insurance products, including commercial automobile, homeowners, dwelling fire, and umbrella and business owner policies.

Safety Insurance suffered due to a small earnings miss, an out of favor sector and uncertainty surrounding Massachusetts auto insurance regulation. In essence, investors are concerned that they will not be able to keep increasing their premium volumes in a highly regulated industry that effectively means that Safety is - to a large extent - dependent on the regulators.

We feel that the correction was far too severe and that this is an undervalued company with good management, a clear strategy and solid fundamentals. We strongly encourage you to have a look at the numbers, not only by themselves but also compared to the industry average, and we are sure you will see a company that will offer mid to high double digit returns for year to come.

SAFT 1-yr chart

Disclosure: none