Nasdaq (NASDAQ) · Financial Services
American Coastal Insurance Corporation ACIC
MonitorScore band: 50–60
Scored as a financial: return on invested capital has no meaning for a bank or an insurer, so that criterion is removed from both the score and the maximum.
The thesis, in one sentence
A reanalysis triggered by a receivables red flag finds the automated check measured the wrong line item, but the underlying collection metric is genuinely deteriorating across four straight quarters, even as a renegotiated servicing agreement removed a looming contract expiration.
Written for this site in plain English, without figures. The arithmetic is in the full report.
Key risks
- The underlying collection metric is deteriorating across four straight quarters
- A single third-party servicer handles collection for the receivables book
- A verifiable date test on receivables could downgrade the position further
What would change the verdict
- Net margin falls for two consecutive quarters
- Return on equity falls below a level that still looks attractive
- The corrected collection metric rises further for two consecutive quarters
- Revenue growth drops sharply for a quarter
Read it yourself
Step five of the method is the reader's: open the latest annual or quarterly report and read it before acting on anything here. A score is a summary, and a summary is not understanding.
Next report expected 2026-11-04. The deep report was written against the filings available on 2026-09-16; anything published since is not in it.
Price, one year
Open this week — scorecard, figures and executive summary
This ticker's exact score, its 30-criterion scorecard with the evidence behind each score, the DCF and Monte Carlo figures and the report's executive summary are open to everyone this week, no email required. The chapters after the summary are not — the demo ticker shows what a complete report looks like.
| Score | 58.5% (weighted sum out of 59 points) |
|---|---|
| DCF (min / base / max) | -21.6% / 31.6% / 129.2% |
| P(undervalued) | 87% (20,000 simulations) |
| p5 | p10 | p25 | p50 | p75 | p90 | p95 |
|---|---|---|---|---|---|---|
| -14.7% | -4.5% | 14.9% | 41.8% | 74.2% | 111.2% | 137% |
Percentiles, as a percentage margin against the reference price.
scenarios below today's pricescenarios above today's pricetoday's pricerange of the DCF modelsbase case
Scorecard — all 30 criteria
| # | Criterion | Evidence | Score |
|---|---|---|---|
| Graham | |||
| 1 | Current earnings multiple, against its own sectorpriced in the cheapest tier of its own sector | P/E trailing 4,64x (forward 8,39x) - below the 30th percentile of property insurers | 1 |
| 2 | Price to book — or cash generation, for intangible-heavy sectorsbook multiple low by the standards of its sector; for technology, semiconductors, pharma and e-commerce a high free-cash-flow yield replaces it, because book value means little there | P/B 1,27x on BVPS $7,21 from the filing (book value +20,2% year/year) | 1 |
| 3 | Earnings multiple times book multiplethe combined earnings-and-book multiple below a Graham-style ceiling | P/E x P/B = 4,64 x 1,27 = 5,9 (threshold 22,5) | 1 |
| 4 | Dividend actually paida dividend paid without interruption over the last five years | Intermittent dividends: $10,3 mil. (2021), $2,6 mil. (2022), 0 (2023), $24,1 mil. (2024), 0 (2025), $36,6 mil. special (Q1 2026) - not 5 consecutive years | 0.5 |
| 5 | Dividend yielda dividend yield well above what the average listed company pays | Special dividend $0,75/share = 8,2% on the current price, but one-off, with no declared recurring policy | 0.5 |
| 6 | Leveragedebt below equity, or a net cash position; for banks and insurers this is judged on regulatory capital instead | Financial: D/E 0,4476, debt/capital 30,6%; $218,9 mil. unrestricted cash, BUT the 0,3:1 leverage covenant blocks refinancing of the $150 mil. maturity on 15.12.2027, and AmCoastal's statutory surplus fell 18,7% in 6 months | 0.5 |
| 7 | Return on invested capital against the cost of that capitalreturns on invested capital clearly above what the capital costs; not computable for financials, which is why their denominator differs | N/A for financials (ROIC undefined) - denominator 59; proxy ROE 29,4-31,7% | 0 |
| 8 | Earnings growth over five yearsearnings per share higher than they were five years ago | EPS today above EPS 5 years ago: net profit -57,9 (2021) / -469,9 (2022) -> 75,7 (2024) / 106,8 (2025) mil. | 1 |
| 9 | Consistency of profitprofitable in every one of the last five years | Positive profit in only 3 of the last 5 years - massive losses in 2021 and 2022 (the UPC era) | 0 |
| 10 | Price against the Graham Numberprice below the Graham Number computed from earnings and book value | Graham Number ~$17,9-18,0 vs price $9,14 (disc_gn 0,9683); and on EPS normalized to owner earnings $70 mil. GN stays ~$15,3 | 1 |
| Buffett | |||
| 11 | A durable moata competitive advantage that is clear and defensible — brand, network, switching cost, licence or cost position | Narrow and real moat - underlying loss ratio 10,8% of gross premiums, underwriting profit every year since inception, G&A 3,6% of gross earned premiums - but it is not a barrier to entry, it is a contractual relationship with a single counterparty (AmRisc, 97% commercial lines, 100% condominium) | 0.5 |
| 12 | How long the moat lastsan advantage that should still be standing a decade from now | The AmRisc restructuring on 14.09.2026 removed the 1.01.2029 expiration: automatic annual renewal, 48-month notice period, minimum 4 years from notification - horizon pushed to at least 2030, so 5-10 years, not 10+ | 0.5 |
| 13 | Return on equity, sustaineda high return on equity held for years without leaning on debt, measured after one-off gains are normalised away | ROE 29,4% (verifier) / 31,7% (tracker), above 15% in each of the last 3 years, with D/E 0,4476 below 1; sustainable ROE implied by owner earnings $70 mil. = 20,5% | 1 |
| 14 | Margins against the sectornet or operating margins above the sector average, by a clear gap | Net margin TTM 30,3%, Q2 2026 26,5% - more than 5pp above the property insurer average; combined ratio FY2025 60,1% | 1 |
| 15 | Quality of managementa management team with a long track record of allocating capital well | B. Bradford Martz CEO since February 2025 - 19 months, six quarters of capital decisions; previously CFO through the 2022-2024 restructuring | 0.5 |
| 16 | Skin in the gamemanagement owns a meaningful part of the company and is not selling | Insiders 50,7% (R. Daniel Peed and affiliates), no reported sales | 1 |
| 17 | Predictabilitya business simple enough that next year can be reasoned about | Catastrophe insurer: combined ratio 60,6% -> 74,3% in one year, CFO between -136,0 and +243,5 mil./year - volatility that caps the criterion at 0,5 | 0.5 |
| 18 | Retained earnings put to workevery unit of profit kept in the business creates more than a unit of value | Ambiguous: book/share +20,2% year/year and the first buyback in 7 years, BUT buybacks at ~$10,57 (1,47x book) above today's price, a special dividend funded by an upstream dividend from AmCoastal that cut statutory surplus 18,7% right before hurricane season, and $75 mil. still to be repaid eats into the buyback capital | 0.5 |
| 19 | Pricing powerable to pass inflation on to customers without losing them | No pricing power: net price -24% year/year, net earned premiums -11,1%, management confirms pressure on rates, deductibles and acquisition costs through 2027 | 0 |
| 20 | Margin of safety against the valuation modelsprice meaningfully below where the triangulated models put intrinsic value; for banks the dividend discount model is used, never analyst consensus | Median MOS +31,6% across five models (range -21,6% ... +129,2%), Monte Carlo P50 +41,8% with P(undervalued) 87,0% - discount above 20% | 1 |
| Lynch | |||
| 21 | Growth against the multiple paid for itthe multiple paid is small relative to the growth rate bought | PEG makes no sense: profit is falling (revenue guidance cut from $335-365 to $300-320 mil.) | 0 |
| 22 | Rate of profit growthearnings per share compounding fast over the last three years, after one-off and cyclical gains are normalised away | EPS growth is declining, not +20%/year; g1 in the base model set to 0,0% | 0 |
| 23 | Fits a Lynch categoryclearly a fast grower, a stalwart or an asset play — not an ambiguous cyclical or a risky turnaround | Underwriting cycle in the first soft Florida market in 14 years - mixed, not a clear Fast Grower / Stalwart / Asset Play | 0.5 |
| 24 | An unfashionable corner of the marketin a business or a sector nobody is excited about | Coverage of 1-3 analysts, $432 mil. micro-cap, boring segment (Florida condominium associations) | 1 |
| 25 | A story that can be told simplythe investment case can be explained in a couple of minutes, without jargon | The basic story is simple, but the Shoreline Re captive, the GAAP-statutory gap and the reinsurance structure require expertise | 0.5 |
| 26 | Insider ownershipfounders or insiders hold a large stake and have been buying, not selling | Insiders above 10% (50,7%), but no documented insider purchases in the period - only company buybacks | 0.5 |
| 27 | A solid balance sheetnet cash, or debt far below equity | D/E 0,4476 below 0,5 and net cash $159,3 mil., BUT $98,3 mil. is restricted (reinsurance collateral), the rest is regulatory capital against $454,4 mil. of insurance liabilities, and the covenant blocks refinancing | 0.5 |
| 28 | Market sharetaking share from competitors rather than merely defending it | Policies in force +1,2% (4.402 -> 4.453), new and renewed policies +11,3%, but at a net price of -24% in a market where Citizens is releasing risk and 17 new insurers have entered - stable share, not growing | 0.5 |
| 29 | Analyst coveragefollowed by few institutional analysts, if any | yfinance reports 1 analyst; the brief finds between 3 and 8 depending on the source - low coverage either way | 1 |
| 30 | Dilution from share-based payshare-based compensation consumes only a marginal slice of revenue each year | SBC $4,3 mil. on revenue $335,0 mil. in FY2025 = 1,28%; $2,8 mil. in H1 2026 = 1,8% of the half-year's revenue - in the 1-2% band | 0.5 |
Subtotals
| Graham | 6.5 |
|---|---|
| Buffett | 6.5 |
| Lynch | 5 |
| Total (30) | 17.25 |
| Score | 58.5% / 59 |
Executive summary, with figures
ACIC — American Coastal Insurance Corporation · deep-value re-analysis (falsifier triggered: dso)
Date: September 16, 2026 · Reference price: $9.14 · Market cap: $432.0 mil. (47,269,517 shares) · NASDAQ · Sector: property insurance, commercial-residential, Florida
Why this report exists. On 09.15.2026, the mechanical triage ran the 6 falsifiers of the thesis written on 08.16.2026 and one triggered: dso, with values of 261.8 and 241.6 days against a threshold of 90. This session's job is to answer a single question — does the hypothesis that supported the verdict still hold? — and only then redo the full analysis.
Primary sources: 10-Q Q2 2026 (filed 08.06.2026), 10-Q Q1 2026 (05.08.2026), 10-K FY2025 (09.03.2026), 10-K FY2024, SEC XBRL companyfacts (CIK 0001401521, direct extracts for the receivables, premium and reserve series), the automated data pack, the research brief (web brief — treated as a deposition, two figures corrected below), Q2 2026 earnings call transcript (08.05.2026), GlobeNewswire press release 09.14.2026, the thesis file, the Monte Carlo simulation, GBL tracker (score dated 09.06.2026).
Two corrections to the research brief, before anything else:
- The brief writes "guidance for fiscal year 2026: profit $85-100 mil.," implying net profit. The company's original wording is "earnings before income tax of $85 million to $100 million" — profit BEFORE tax. The difference is $22 million a year and changes the valuation base by 32%. The correct figure, after the H1 2026 effective tax rate of 24.0% ($13,006 thousand / $54,156 thousand), is $64.6-76.0 mil. net profit, midpoint $70.3 mil.
- The brief attributes to a "compiled SEC 8-K source" an FHCF contract effective 06.01.2026 with 90% coverage, mandatory layer ~$571.5 mil. There's no mention of FHCF anywhere in the Q2 2026 10-Q, the FY2025 10-K, or the reinsurance program description (Note 6 and the Reinsurance section). The filing's description of the program is explicitly private occurrence-based, with exhaustion at $1.68 bn on the first event. I don't use the FHCF figure anywhere in this report; if it exists, it isn't in the public file I read.
Executive summary (1 page: thesis, estimated value, verdict)
The answer to the question that commissioned this report: the falsifier triggered on a metric the thesis wasn't measuring. The mechanical checker computes dso as yfinance receivables / quarterly revenue × 91. For ACIC, yfinance's "Accounts Receivable" line is $237.3 mil. as of 06.30.2026 — that's premiums receivable $119,915 thousand PLUS reinsurance recoverable $117,435 thousand, a sum that reconciles to the last dollar with the 10-Q balance sheet. The reinsurance recoverable is a claims-recovery asset, not a revenue collection; including it inflates the ratio 2-3x. Consequence: the metric was already above 90 in every quarter yfinance retains — 176.0 (09.30.2025), 209.5 (12.31.2025), 241.6 (03.31.2026), 261.8 (06.30.2026). The falsifier was triggering from the day it was written. Between 08.16.2026 and today no new filing has appeared (Q2 was filed 08.06.2026; Q3 comes 11.04.2026), so zero new information caused the trigger.
On the metric the thesis actually measured, the verdict is more nuanced — and more interesting. I reconstructed the prior author's definition from his own figures: premiums receivable / TTM gross earned premiums × 365. It reproduces the cited series exactly (27.7 for FY2023, 26.6 for FY2024, 39.7 for FY2025, 72.9 for TTM as of 06.30.2026 — all four match to a decimal). At 72.9 days, the 90 threshold isn't reached: the falsifier is at 81% of the threshold. But the claim it was protecting wasn't "DSO stays below 90," it was "the receivables growth remains isolated — hasn't worsened into a structural pattern." That claim is falsified by the evidence, even if not by the number: 26.6 → 39.7 → 44.6 → 72.9 are four consecutive rising observations, and receivables relative to unearned premiums went from 13.9-19.2% (2024 – mid-2025) to 28.2% / 29.8% / 35.7% (Q4 2025, Q1 2026, Q2 2026). It's not an isolated quarter. It's a level shift over three quarters, plus a $43.2 mil. jump concentrated in Q2 2026.
Structural deterioration or noise? My verdict: a real symptom of a soft market, with near-zero credit risk, amplified by the worst possible measurement date. The reasons, each with its own figure: (a) the credit-loss allowance on premiums receivable is zero as of 06.30.2026 ($0; $26 thousand a year earlier), and the Note 17 roll-forward shows no write-offs; (b) the policy stated in the 10-K is a policy-level test whereby the receivable can't exceed the associated unearned premium — at $119.9 mil. receivables against $335.5 mil. unearned premiums, coverage is 2.8x, and a non-payer is canceled with the unearned premium released, so loss-given-default is near zero; (c) the half-year's operating cash flow is POSITIVE $52.8 mil., so the company generated cash after absorbing the $49.5 mil. receivables build; (d) June 30 is the balance-sheet date right after the June 1 renewal, when the entire portfolio is billed and uncollected — historically, the balance collapses in Q3 ($18.6 mil. at 09.30.2024, $30.3 mil. at 09.30.2025). Against: there's no explanation in any filing or on the analyst call, and the context — net price down 24%, new and renewal policies +11.3%, policies in force +1.2% — describes exactly a firm defending volume with wider commercial terms. The deciding test is the 09.30.2026 balance, published November 4.
What actually changed versus the prior analysis. One material thing, and it's positive: on 09.14.2026 the company announced a restructuring of the exclusive agency agreement with AmRisc, effective 07.01.2026. The old contract had a fixed expiration of 01.01.2029 — i.e. the firm's largest single-point-of-failure risk (97% of the commercial-lines business, 100% of condominium revenue, plus premium collection) had a contractual cliff 27 months away. The new agreement has no expiration date, auto-renews annually and requires 48 months' notice plus a minimum four years from notification. The risk hasn't disappeared, but its horizon has moved from 2029 to "at least 2030, with four years' notice." Otherwise: Q2 2026 is the same quarter the prior report read, the price fell from $9.86 to $9.14 (−7.3%), and KBRA raised AmCoastal's financial-strength rating to A from A− and the issuer rating to BBB from BBB− (07.21.2026, Note 18, subsequent events).
Estimated value. The stated owner-earnings base is $70.0 mil. — not CFO − capex, which over the trailing 12 months gives minus $31.0 mil. from post-Milton claims settlement. The external check the method requires: the 3.5-year average of operating cash flow minus capex (2023: −$136.0 mil.; 2024: +$243.5 mil.; 2025: +$71.0 mil.; H1 2026: +$52.8 mil.) is +$66.1 mil./year — within 6% of the stated base, so $70.0 mil. is confirmed by cycle-level cash, not invented. The implied owner-earnings yield, 16.2%, sits between the trailing yield (21.6%, P/E 4.64) and the published forward yield (11.9%, forward P/E 8.39) — consistent with what the market sees, unlike the "−7.2% FCF yield" in the data pack, which is pure calendar artifact. The five-model triangulation gives a margin-of-safety range of −21.6% to +129.2%, median +31.6%; Monte Carlo across 20,000 scenarios gives median intrinsic value $12.96/share, median MOS +41.8%, undervaluation probability 87.0%.
Verdict: INTERESTING — small accumulation maintained (1-2% of portfolio), explicitly conditional on the November 4 report. The thesis doesn't die. The falsifier that triggered was measuring something else; and on the business fundamentals, the only material change in the last month is a structural improvement (AmRisc). But the claim "receivables remain an isolated signal" was wrong and I withdraw it: the level shift is real, has lasted three quarters, and has no published explanation. Sizing stays as before — small, assuming a hurricane year, not a quiet one — and I add a verifiable condition: if premiums receivable as of 09.30.2026 doesn't fall below ~$50 mil., the seasonal explanation dies and the thesis must be rewritten without it.
That is chapter one of the deep report, figures included. Chapters two onwards stay closed for the five open tickers. See what a complete analysis looks like — this week's demo ticker: SNT Energy Co., Ltd. (100840) →
Full report contents
- Executive summary (1 page: thesis, estimated value, verdict)
- 🔒 The business and the moat (how it makes money, competitive advantage, durability) (Available in the full report)
- 🔒 Management and capital allocation (track record, buybacks/dividends/acquisitions, skin in the game) (Available in the full report)
- 🔒 What changed over the last 4 quarters (balance sheet line by line from the data pack, margins, cash conversion — explain EVERY large variance) (Available in the full report)
- 🔒 Balance-sheet analysis — Quality of Earnings (Thornton O'Glove method) (Available in the full report)
- 🔒 CEO profile — Outsider traits (William Thorndike method) (Available in the full report)
- 🔒 Accounting red flags (accruals, dilution, one-offs, accounting-policy changes) (Available in the full report)
- 🔒 Triangulated valuation (conservative DCF with explicit assumptions + earnings power value + 5-year historical multiples + Monte Carlo from step 5; range, not point) (Available in the full report)
- 🔒 Pre-mortem (why the thesis could be wrong — 3 concrete scenarios) (Available in the full report)
- 🔒 Verdict versus the tracker's GBL score (convergence/divergence and why) (Available in the full report)
See what a complete analysis looks like — this week's demo ticker: SNT Energy Co., Ltd. (100840) →
Evaluation history
| Date | Verdict |
|---|---|
| 2026-07-17 | Interesting |
| 2026-08-06 | Monitor |
| 2026-08-07 | Monitor |
| 2026-08-16 | Monitor |
| 2026-09-06 | Monitor |
| 2026-09-16 | Monitor |
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