ProAssurance Pops On Acquisition News, But Think Twice About Opportunity Cost

(9min)

Summary

  • ProAssurance Corporation is being acquired by The Doctors Company, resulting in a 48% stock gain, with an 8% discount remaining on the buyout price.
  • The acquisition, valued at $1.3 billion, is not subject to financing conditions, reducing the risk of deal failure due to funding issues.
  • PRA's financials show modest growth and challenges, with a declining book value and underperforming return on capital employed compared to peers.
  • Despite the high likelihood of deal closure, I recommend holding off on buying PRA now due to potential opportunity costs and waiting for a lower price.
  • Looking for a helping hand in the market? Members of Beyond the Wall Investing get exclusive ideas and guidance to navigate any climate. Learn More »

Contemporary art collage. Hands holding puzzle pieces and trying to connect it against blue background.

Anton Vierietin

Introduction

ProAssurance Corporation (NYSE:PRA), an $800 million market cap specialty insurer with a focus on medical professional liability, has recently become the target of an acquisition by The Doctors Company, a physician-owned medical malpractice insurer.

Hold On! Can't find the equity research you've been looking for?

Now you can get access to the latest and highest-quality analysis of recent Wall Street buying and selling ideas with just one subscription to Beyond the Wall Investing! There is a free trial and a special discount of 10% for you. Join us today!

This article was written by

12.84K Followers
Daniel Sereda is chief investment analyst at a family office whose investments span continents and diverse asset classes. This requires him to navigate through a plethora of information on a daily basis. His expertise is in filtering this wealth of data to extract the most critical ideas. He runs the investing group Beyond the Wall Investing in which he provides access to the same information that institutional market participants prioritize in their analysis. Learn more.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

About PRA Stock

SymbolLast Price% Chg
Market Cap
PE
Yield
Rev Growth (YoY)
Short Interest
Prev. Close
Compare to Peers

More on PRA

Related Stocks

SymbolLast Price% Chg
PRA
--