A previous AIM Fund holding: Insys Therapeutics (INSY) “by Joe Mungenast, graduating AIM student.

Insys Therapeutics (INSY, $9.09) “This stock was sold earlier in the year from the AIM Fund”

By: Joe Mungenast, AIM student at Marquette University

Disclosure: The AIM Equity Fund currently holds this position. This article was written by myself, and it expresses my own opinions. I am not receiving compensation for it and I have no business relationship with any company whose stock is mentioned in this article.

Summary

Insys Therapeutics, Inc. (NASDAQ: INSY) is a commercial-stage specialty pharmaceutical company, which develops and commercializes supportive care products. It focuses on utilizing its proprietary formulation technologies to address the clinical shortcomings of existing commercial pharmaceutical products (Factset).

The company markets Subsys, a proprietary sublingual fentanyl spray for breakthrough pain in opioid-tolerant cancer patients; and Dronabinol Oral Solution, a proprietary orally administered liquid formulation of dronabinol. It offers its Subsys through its incentive-based commercial sales force (Factset).

A recent lawsuit involving former executives at the company has been the primary force driving this stock down in the fourth quarter.

Insys is currently trading at its 52-week low with seemingly few drivers to help drive this stock move upwards. Insys does have a drug in pre-registration and two more in Phase I and II testing respectively, but their primary source of income is generated by their main drug, Subsys. Subsys contributes nearly 100% of sales by product segment, and is the drug involved in the lawsuit.

Key Points: Insys has suffered from a gradual decline in its stock price over the past two quarters, with a brief uptick due to President-elect Trump. Most recently, however, the company has been embroiled in a significant ethical debate, aimed at former Insys executives.

According to a WSJ article,* former CEO Michael Babich and 5 other officers “were charged with conspiracy to commit racketeering, conspiracy to commit wire and mail fraud, and conspiracy to violate the anti-kickback law.”

Mr. Babich had been trying to defraud health insurers and bribe doctors to prescribe Insys’ Subsys, the sublingual fentanyl spray. Fentanyl, a Scheduled II drug in the United States, is a synthetic opioid that is 50 to 100 times stronger than morphine. As a result, this drug is far more addictive than the already very addictive morphine, and yet is still legal to be prescribed. While doctors would normally be hesitant to prescribe such a powerful drug, Mr. Babich used his influence as CEO of Insys to indirectly and unlawfully push his product onto unsuspecting patients.

What has this stock done lately?

After a brief rise to $14.53 under the announcement of a Trump presidency in November, Insys has since declined down to $9.09, primarily due to the antics of Mr. Babich and other former executives. There are currently few positive catalysts for this stock aside from their product in pre-registration.

Past-Year Performance: Insys has closed out the past three quarters at $15.99 for Q1, $12.94 for Q2, and $11.79 for Q3. While the stock has rallied twice in the past year (up 27% in the first week and a half of August ($15.20-19.38) and up 45% in the first two weeks of November ($10.02-$14.53)), INSY is down over 69% from the end of last year ($29.38-9.09).

My Takeaway

It is my personal belief that this stock should not have been held within the portfolio for two reasons. One, this stock has not given any quantitative reason for AIM to again hold it. Cash Flow from Operations is expected to decline 15.7% from last year. EPS is expected to be down to 0.35 from last year’s 1.38, and thusly Insys’ P/E is up to 26.2x for 2016 estimates from 20.7x in 2015. The relatively high P/E coupled with poor stock performance in 2016 leaves little room for interest from a value perspective.

Secondly, this company’s products succeed on the fact that they are potent and extremely addictive opioids. Fentanyl has been creeping into the limelight in the United States as more research shows the possibility of a fentanyl outbreak, especially in areas of high heroin use. (http://www.wsj.com/articles/former-insys-ceo-arrested-in-opioid-prescription-kickback-case-1481228056) To conclude, we would be holding a company who sells a highly addictive product. 

As the analyst for the healthcare sector I urge that we should not add this holding because of the addictive nature of their business and because of lagging financial performances!

The AIM Program's Chicago Quantitative Alliance (CQA) Challenge Teams Are Off to a Good Start

Marquette’s AIM Program has two teams entered in this year’s Chicago Quantitative Alliance (CQA) Challenge

Each year the Chicago Quantitative Alliance (CQA) holds a portfolio management contest for university students, where the students must manage a portfolio with strict requirements.  The contest runs each year from the end of October until the start of April. 

The CQA is a professional investment organization comprised of leading quantitative investment practitioners.  CQA membership includes investment managers, academics, plan sponsors, consultants, and other investment professionals.  The primary goal of the organization is to facilitate the interchange of ideas between quantitative professionals.

 

The CQA Investment Challenge is an equity portfolio management competition that offers students the opportunity to learn and apply stock selection and portfolio management skills in a simulated, real life hedge fund experience.  The Challenge provides teams with first-hand experience of being a portfolio manager by managing money, explaining their investment process and discussing performance.

This year Marquette’s AIMProgram has entered two teams – one comprised of seniors and the other made up of juniors. The teams, operating under the guidance of Mr. Bill Walker, handle all aspects of portfolio management including stock selection, portfolio construction, and risk management.  In addition, each team is required to complete a video presentation at the end of the challenge that provides a review of their investment team, investment philosophy/process as well as an update on performance.

• Through Saturday, December 17, 2016, Marquette’s senior-led team ranked 17^th out of 54 teams in terms of total return; 14^th on the basis of Sharpe Ratio; and 11^th on the basis of Alpha generation.

• Through Saturday, December 17, 2016, Marquette’s junior-led team ranked 40^th out of 54 teams in terms of total return; 36^th on the basis of Sharpe Ratio; and 14^th on the basis of Alpha generation.

Throughout the competition teams will work with an assigned CQA member who will serve as a mentor and guide.  The Challenge is an invaluable real-life view into managing money in the investment management industry.

2016 Marquette CQA Team

The Challenge, which is in its 5th year, has had four very successful years with top universities from around the world competing in the event. 

Dr. David Krause, AIM director said, “Last year’s team found this to be a unique opportunity to manage a market neutral portfolio, interact with quantitative practitioners and compete against other schools. I know they gained much and this year’s teams should also find the Challenge to be a rewarding activity. We encourage our students to be active in extracurricular activities.”

The students are tasked with creating portfolios on StockTrak. To learn more about this contest and read what past participants have thought of the contest, please visit www.cqa.org/investment_challenge.

The objective of the competition is to successfully manage an equity long/short market neutral portfolio over the course of the academic year.  Key aspects of the competition include:

•           The contest runs from the end of October through the end of March

•           One team per university.  A team can consist of undergraduate junior/senior and/or MBA students. Typically between 3 to 5 members per team.

•           A faculty professor will be responsible for selecting and guiding the team. 

•           Each team will have a CQA member serving as a mentor and advisor.

•           The contest will utilize the Stock-Trak investment simulation platform

•           The winning team will be determined by the combination of their absolute return, risk adjusted return and an evaluation of a strategy presentation with an emphasis on the risk adjusted returns.  

•           Prizes will include $3,000 in prize money distributed across the top three teams ($1500, $1000, $500), winning team professor invited to attend the annual CQA fall conference in Chicago (September) or Las Vegas (April) and resumes of winning team students circulated to all CQA members. 

When creating the portfolios, the students have to follow certain rules:

·         The portfolio has to have a beta of +/- 0.5.

·         The portfolio has to be long/short and market neutral.

·         The ‘universe’ of potential stocks is limited to 1,000 liquid large and midcap stocks.

·         The portfolio has to have less than 5% of its holdings in cash.

We will update the rankings periodically between now and April:

• Through Saturday, December 17, 2016, Marquette’s senior-led team ranked 17^th out of 54 teams in terms of total return; 14^th on the basis of Sharpe Ratio; and 11^th on the basis of Alpha generation.
• Through Saturday, December 17, 2016, Marquette’s junior-led team ranked 40^th out of 54 teams in terms of total return; 36^th on the basis of Sharpe Ratio; and 14^th on the basis of Alpha generation.

An AIM Equity Holding: Carrizo Oil & Gas (CRZO) by Casey McCelland. "Higher Oil Prices Should Send Carrizo Soaring"

Carrizo Oil & Gas (CRZO, $41.29): “Fly Eagle Ford Fly”

By: Casey McClelland, AIM Student at Marquette University

Disclosure: The AIM Equity Fund currently holds this position. This article was written by myself, and it expresses my own opinions. I am not receiving compensation for it and I have no business relationship with any company whose stock is mentioned in this article.

 Summary

• Carrizo Oil & Gas (NYSE:CRZO) Operates as an oil and gas, exploration and production company (E&P), headquartered in Houston, Texas. The company operates primarily in South Texas, specifically in the low cost Eagle Ford Shale Formation.

• CRZO is benefiting mightily from the oil price rebound ($50+) due to the recent OPEC agreement on the production cap for the major oil producing countries.

• CRZO completed a bolt on acquisition with Sanchez Energy to expand their premier acreage in the low cost Eagle Ford play.

• Due to the positive sentiment in the market and the quality land positions that CRZO has to offer, the company is looking to add a third rig to their production which will push their growth to over 20% next year.

Key points: Carrizo is the owner of some of the best low cost assets available in the premier Eagle Ford. They have expanded this asset in the last quarter by making an acquisition with Sanchez energy to buy their Eagle ford assets. 

The company has made a bullish stance on oily specific plays and this acquisition is further proof of their stance. With weighted average break even points on their Eagle Ford assets being $35 a barrel, they are positioned to be profitable on these assets in the near term due to the rebound in prices.

Along with their continued development of their main asset in the Eagle Ford, CRZO is continuing to see improvements on their Delaware Basing play as management stated that during the last quarter in the Delaware, “we are drilling more wells than we planned because we’ve seen results come in better than we thought on the west side of our acreage.” This continued improvement and development of the basin can lead to a growth in their reserves potential or as a good sell off asset to help improve their Eagle Ford play or pay down their debt.

The major news for the industry as a whole was the OPEC agreement that was made on November 30^th this year. This deal surprised many experts as leading up to the deal there was a lot of skepticism on how the deal would be able to be constructed with none of the countries wanting to have to share the burden. Some of the biggest drivers for the deal was the unexpected cooperation by the Russian government and Iraq taking on its first quotas since the 1990s. Though this deal does not sure up the whole oil glut because the U.S. shale producers are outside of the agreement, it is a step in the right direction and should provide more stability in the commodity market.

With the addition of a third rig in the next year, CRZO has made an aggressive stance on production for the next year and their increase in CapEx spending is indicative of that. The OPEC agreement compounded with their further development of their oily assets has pushed the company to ramp up production in the hopes of capturing the positive sentiment in the market.

What has the stock done lately?

In the past 3 months, the stock has performed moderately well with a 9.26% return over that time frame. This recent uptick is due to the OPEC deal that surprised many investors. Along with the recovery, CRZO reported impressive numbers and had a positive outlook on their position in the market.

Source: FactSet

Past Year Performance: Since the introduction of CRZO in to the portfolio, the stock has performed extremely well and surpassed its price target early in its time in the portfolio. The oil price rebound due to the OPEC meeting has been extremely beneficial for the stock as this provides stability in the market. Our low cost E&P stocks have been great performers for the portfolio due to the entry to the positions being right at the beginning of the oil rebound.

My Takeaway

Carrizo currently is in a favorable position due to its premium assets and stable financial condition. With Net Debt/EBITDA at a manageable 3x and down from the previous quarter, they are financially stable for their near term and have plenty of assets to help pay down the debt in the long term. With the OPEC deal in place, low cost E&P companies are positioned to thrive with stabilized prices going forward. 

I believe that are current portfolio weighting towards low cost players is justified and feel that going forward it will continue to reap the portfolio positive rewards. And the higher oil prices certainly help too!

An AIM Equity Holding: Achaogen (ticker: AKAO) Increased More Than 200% This Week!

 Achaogen’s (AKAO) stock price soared earlier this week

  

On September 9, 2016, Andrew Szyman (AIM student) pitched Achaogen, Inc. (ticker: AKAO). The stock was added to the AIM Equity Fund the following week.

The firm is a clinical-stage biopharmaceutical company that discovers, develops, and commercializes antibacterials to treat multi-drug resistant (MDR) gram-negative infections in the United States. The company is principally developing plazomicin, which is in Phase III clinical trial for the treatment of serious bacterial infections due to MDR Enterobacteriaceae, including carbapenem-resistant Enterobacteriaceae. 

Andrew wrote, “Achaogen has the potential to leverage plazomicin’s superiority to current medical treatments for many years to come as the drug has demonstrated potential to penetrate a high unmet medical need with a growing patient population, strong physician interest, and a capability to lower direct healthcare costs. Due to the aforementioned, it is recommended that AKAO be added to the AIM Micro-Cap Fund at a target price of $6.07, yielding an upside of 40%.” Nice call!

His recommendation was correct – this week the stock rose from about $5 to $15 per share. On Monday, Needham & Company upgraded Achaogen from Hold to Buy with a price target of $19. There has also been substantial interest in the stock as a possible takeover candidate – and the firm also reported some Phase 3 that data were overwhelmingly positive - pushing the company towards additional regulatory filings and hopefully eventual approvals.

An AIM Equity Holding: Mercury Systems (MRC) by Nick Dykema. “Mercury Systems Scores Following Earnings Release and Trump Election"

“Mercury Takes Off Following First Quarter Earnings Release”

Mercury Systems, Inc. (MRCY, $30.15) - To Mercury and Beyond!

By: Nick Dykema, AIM Student at Marquette University

Disclosure: The AIM Equity Fund currently holds this position. This article was written by myself, and it expresses my own opinions. I am not receiving compensation for it and I have no business relationship with any company whose stock is mentioned in this article.

Summary

Mercury Systems, Inc. (NYSE: MRCY) provides prime contractors with secure processing subsystems to be used in the Department of Defense’s (DoD) critical defense and intelligence programs. Over half of MRCY’s revenues are derived from three prime defense contractors: Lockheed Martin (23%), Northrop Grumman (8%), and Raytheon (20%).

• MRCY’s stock price soared following the release of Q1 FY17 earnings that were highlighted by increased bookings and smooth integration of Microsemi’s Carve-Out business.

• Management has adjusted Q2 FY17 guidance to reflect a stronger second-half of the year compared to the first-half.

• The company increased FY17 guidance for revenue, GAAP income, and adjusted EBITDA.

• Mercury received a silver award for its Ensemble^® LDS6526 server blade.

Key points:

Mercury’s acquired and organic businesses experienced better than anticipated success during Q1 FY17. There were many positives to the Company’s first quarter performance, which was highlighted by many of its performance metrics coming in at the high end of guidance. 

Mercury’s October revenues increased 50% YoY (8% organic growth), and management expects FY17 to post “solid” organic revenue growth as a whole. Compared to the same quarter of the previous year, GAAP income increased by 34% while adjusted EBITDA increased by 54%. Defense initiatives and programs, such Aegis, F-35, and Digital Electronic Warfare System, were the reason for Mercury’s boost in revenues.

Signs of the DoD’s plan to export more defense technology are surfacing within Mercury. The company has already booked Patriot foreign military sales to Japan, which is only the beginning of increased foreign sales. In addition, MRCY’s total bookings grew 41% during the quarter. Management expects sales to Lockheed Martin and Northrop Grumman to increase, because the two prime contractors have received production contracts for additional Surface Electronic Warfare Improvement Programs (SEWIP). The significant increase in bookings reaffirms the company’s expansion plans.

Mercury Systems has done an excellent job of integrating the acquired Carve-Out business from Microsemi. All of the Carve-Out business’ infrastructure and security has become integrated into Mercury’s existing platform, and MRCY is beginning to see the cost synergies, purchasing synergies, and improvements in manufacturing efficiencies materialize. Likewise, the company has discovered additional growth opportunities following the integration of Microsemi. Looking into the future, Mercury’s management reiterated their plans to pursue future acquisitions that can further develop their most important products (Radio Frequency and secure processing subsystems).

After looking at the company’s Q1 FY17 earnings call, specific financial results jump out. Adjusted earnings per share increased to $0.22 (high end of management’s guidance) from Q1 FY16’s adjusted earnings of $0.19. The company acknowledged capital expenditures will be far greater as MRCY begins construction of its new headquarters. 

Since acquisition integration will accelerate in the second-half of the year, management has revised their revenue and adjusted EBITDA guidance. In Q2, Mercury is forecasting revenue to be between $91 million and $95 million, adjusted EBITDA between $18 million and $21 million, and gross margin between 46% and 47%. 

Additionally, second quarter GAAP income is expected to be in the range of $2.7 million and $4.5 million, which would equate to earnings between $0.07 and $0.11 per share. The company has slightly increased their FY17 revenue guidance, which is now in the range of $370 million and $380 million. In addition, GAAP income is expected to be between $19.8 million and $22.4 million, while adjusted EBITDA will be in the range of $83 million to $87 million.

It should be noted Mercury Systems’ Ensemble^® LDS6526 server blade was presented a silver award at the Military and Aerospace Electronics 2016 Innovators Awards Program. According to a press release on MRCY’s Investor Relations page, “This program recognizes the most innovative solutions in military and aerospace technology products and systems, as judged by a panel of senior third-party expert professionals.” The award further exemplifies Mercury’s commitment to research and development and pursuit of cutting edge technology within the defense industry.

What has the stock done lately?

Since being added to the AIM Equity Fund in mid-October 2016 at a price of $23.57, MRCY’s stock price has increased 27.9%. The company’s stock price has been climbing since the release of its Q1 FY17 earnings call. Even after the stock price’s initial earnings kick, Mercury has increased its value by 10.5% in November. 

Most of November’s success can be attributed to the outcome of the United States presidential election. It is believed president-elect Donald Trump will increase defense spending, which explains MRCY’s 18% jump in the week following his election.

Past Year Performance:

Over the last year, Mercury’s stock price has increased by 53.3%. Even though the stock has shown to be quite volatile following management’s release of earnings, the stock price has exhibited strong positive growth over the last year. Mercury’s 52 week high was $32.49, while its low was $15.67. Currently, the company’s stock price is trading near its highest level of the past year.

Source: FactSet

My Takeaway

I believe Mercury Systems is destined for success in the coming years. The company has had a few minor setbacks during the last three years, but has been able to increase its stock price by 334% since February 2013. Recently, MRCY does not seem to be showing signs of slowing down. 

The company continues to increase sales and dominate the secure processing subsystems segment of the defense technology industry. Due to a positive outlook for defense spending, Mercury is well-positioned to increase their future bookings and provide prime contractors and the Department of Defense with technology for their future defense and intelligence programs. 

An AIM Equity Holding: Wintrust Financial (WTFC) by Donnie Smiley. “A solid regional bank - WTFC should remain in the portfolio in 2017 as yield curve steepens"

Wintrust Financial Corporation (WTFC, $70.34): “Gaining the Consumers Trust - and Prospering in the Current Rate Environment”

By: Donnie Smiley, AIM student/MSAE Graduate program

Disclosure: The AIM Equity Fund currently holds this position. This article was written by myself, and it expresses my own opinions. I am not receiving compensation for it and I have no business relationship with any company whose stock is mentioned in this article.

Summary

·         Wintrust Financial (WTFC) offers personal and commercial banking services, wealth management services and specialty financial products. The community banking segment makes up about 75% of their bottom line. WTFC operates in Chicago and Wisconsin through 115 branches.

·         Net Income for Q3 2016 increased to $53M, up from $38M YoY

·         The company reported net interest income of $184M in Q3 2016, up from $165M YoY

·         The loan portfolio increased from $17B to $19B as a result of success in their commercial banking segment

·         WTFC pays a quarterly dividend of $0.12 per share ($0.48 on an annualized basis)

Key Points: WTFC was originally pitched in October in 2014 and has been a very solid performer for the AIM equity fund. The company has a strong financial position and as interest rates continue to rise, WTFC is best positioned to benefit relative to their peers. WTFC has the advantage of being large and they offer a wide variety of electronic banking options for both commercial and retail customers. 

In July 2016, WTFC announced they acquired First Community Financial Corporation which had about $172M in assets between two locations in Illinois. The company continues to make meaningful acquisitions which are fueling growth and contributing to net income. While the majority of the growth has been from the commercial banking segment, the specialty finance and wealth management segment both reported small increases in net income for Q3 2016. Total assets are $25B as of September 30, 2016 representing an increase of 15% YoY.

What has the stock done lately?

WTFC had a solid Q3 2016 which was highlighted by a 38% increase in net income YoY, a quarterly dividend of $0.12 and a 10% increase in net interest income YoY. The company is in a strong financial position proven by their ability to pay a dividend and their ability to continue making successful acquisitions. 

WTFC is in a fantastic position to benefit from increasing interest rates as the Fed begins to hike rates, with a consensus on December 2016. These factors all provide nice tailwinds for the company to continue its outperformance, +27.8% YTD.

Post Election Performance: Over the past 12 months WTFC has increased over 30% to $70. The stock was originally added into the AIM small cap portfolio at a price of $46.57. The Trump election has helped regional banks and Wintrust's stock price has risen to more than $70 per share. As the company continue to grow within the commercial banking segment, the stock price should continue to rise.

Source: Yahoo!Finance

My Takeaway

WTFC has had a solid 52 week period and prospects for the future remain high. I am optimistic that the stock will continue to rise as the yield curve steepens. Since WTFC was added to the portfolio, it has easily passed the original price target of $50.53 and doesn’t seem to be slowing down. I expect loan growth and acquisitions to continue, resulting in additional upside. For these reasons, I believe WTFC should remain in the AIM small cap portfolio well into 2017. 

An AIM holding: Amerisafe. (AMSF) by Brendan Hopkins. "Another point of view on Amerisafe"

Amerisafe, Inc. (AMSF, $65.40): “Management Plays it Safe and Gets Praised”

By: Brendan Hopkins, AIM Student at Marquette University

Disclosure: The AIM Equity Fund currently holds this position. This article was written by myself, and it expresses my own opinions. I am not receiving compensation for it and I have no business relationship with any company whose stock is mentioned in this article.

 Summary

• Amerisafe, Inc. (NYSE:AMSF) operates as an insurance holding company focusing on providing workers’ compensation insurance for small to mid-sized companies engaged in the hazardous industries of construction, trucking, and agriculture. The company is headquartered in DeRidder, LA and actively participates in workers’ compensation markets in 27 states.

• Softening Rate Environment within the Workers’ Compensation market: Premiums written in 3^rd quarter are down 2.4% from previous quarter as management turns its attention to policy count (up 3.6%).

• 3^rd Quarter ROE was 14.2% (down 5% from 3Q15) and BVPS was $26.51 (up 11.7%).

• New business is down 7.3%, but renewals are up 0.5%.

• AMSF reached both its 52-week and all-time high on November 28 at $65.70 (52 week range: 46.88 – 65.70). A special dividend of $3.25 and a regular quarterly dividend of $0.18 are both to be paid on December 25^th to the shareholders on record as of December 15^th.

Key points:

AMSF’s management has established their main focus on discipline rather than chasing premiums. This discipline has and will continue to be executed in risk selection, pricing, claims handling, and managing costs. As the workers compensation market has softened (low investment yields are preventing it from returning to a soft cycle) companies are becoming increasingly competitive and are continuing to chase underwriting profits in order to meet their ROE goals. 

While competitors continue to search for premium, AMSF’s management has taken a different approach and has turned their attention to protecting the underwriting margins in order to return value to shareholders. With premiums down 2.4% this past quarter, policy count has really taken the top spot on managements to do list as it has grown 3.6% since the second quarter.

For more than a year, AMSF has felt the negative effects of this market softening but has outperformed their peers because of their experienced management team and their ability to avoid unnecessary risk. This past quarter, new business was down 7.3%, open claims fell 4.1% from 3Q15, and return on equity dipped just shy of 5% from last year. Beyond this there was some good news with renewal business climbing 0.5% and their losses and LAE ratio have both enjoyed favorable development over the past year, allowing net income to actually increase even with a drop in revenues. 

Currently the entire market of workers compensation is struggling, but with infrastructure expenditures more than likely to occur, companies within this market undoubtedly will benefit. AMSF is currently positioned to take advantage of this increased activity because of their capable management and their exposure to the specific markets that will be involved (construction & trucking), allowing shareholders to reap the profits.

What has the stock done lately?

On November 28, the stock reached its all-time high of $65.70 and has been priced above $60 for the majority of this month. In a 3-month scope, the stock has been relatively volatile dropping as low as $53.60 just prior to reporting 3^rd quarter earnings and a favorable jump following the earnings report because of the company’s ability to exceed expectations and present managements capabilities. To add to this, the board of directors have approved a regular quarterly dividend of $0.18 and a special dividend of $3.25 (special divs in past 3 yrs total $7.75/share) to be paid at the end of December.

Past Year Performance:

AMSF’s price has increased 21.4% YTD and has floated above $60 for the better half of this year. The 52-week range during this time was 46.88 – 65.70 and you can essentially describe the shape of the 1yr price chart as a teeter-totter with a boulder placed on the left side, just an upward slope the whole way with one large dip during the month of November.

Source: FactSet

My Takeaway

AMSF was originally added to the AIM equity fund during a time in which the workers compensation market was enjoying large premiums and performing exceptionally well. Currently this is not the case, but Amerisafe has demonstrated that their management will stick to their core principles and emphasize the importance of shareholder returns through discipline. I am somewhat hesitant, as the BOD has announced a large special dividend and the stock has reached an all-time high during a period where there are large amounts of financial metrics underperforming. 

I praise the company’s capital management and anticipate that the focus on infrastructure and expanding our economy will improve AMSF, but I am recommending that we strategically trim our position in our portfolio before the next earnings report.

Source: FactSet