Tiptree Stock Drops 17% Below 200-Day Average, Analysts Predict Upside
Tiptree Inc., a diversified holding company, has witnessed its shares trading over 17% below their 200-day moving average. Despite this, analysts anticipate an 18% upside, and Weiss Ratings maintains a 'Buy' recommendation. Tiptree is also in the process of significant divestments, with the sale of its auto insurance arm, Fortegra, and mortgage subsidiary, Reliance First Capital, on the horizon.
Tiptree's latest quarterly results present a mixed picture. While adjusted net profit climbed by 3.2%, net profit dropped from $11.9 million to $6.4 million, largely due to transaction costs from divestments. Tiptree's total revenue, however, rose by 9.3% to $540.3 million. The company is selling its car insurance arm, Fortegra, to DB Insurance for $1.65 billion, and its mortgage subsidiary, Reliance First Capital, for $51 million. Once both deals close, Tiptree could have a war chest of roughly $930 million. This follows Allstate's acquisition of Fortegra for $1.65 billion in November 2020.
Tiptree's stock performance and recent financial results suggest a complex situation. While analysts remain optimistic, Tiptree's significant divestments suggest a strategic shift. The impending deals could provide Tiptree with substantial liquidity, positioning the company for future growth or transformation.
