First Acceptance Corp. (FAC, Financial) Director Rhodes R. Bobbitt purchased 80,600 shares in two transactions on Nov. 14 and Nov. 16, according to the Securities and Exchange Commission.
Bobbitt purchased his first 35,000 shares for 91 cents per share then purchased an additional 45,600 shares for $1.17 per share. Bobbitt owns 149,426 shares of the company.
First Acceptance has a market cap of $49.32 million, a price-book (P/B) ratio of 0.64, a price-sales (P/S) ratio of 0.12, a price/tangible book value of 1.16 and a $4.65 earnings power value.
Guru Jim Simons (Trades, Portfolio) also purchased 21,400 shares in the third quarter for an average price of $1.24 per share. Since Simons' addition the company’s price has declined by an estimated 3%.
According to GuruFocus First Acceptance has a financial strength rating of 5 of 10 with a cash-debt ratio of 2.05. The company also has an equity-asset ratio of 0.17, a Beneish M-Score of -2.45 indicating the company is not a manipulator of its financial statements and a Piotroski F-Score of 2 indicating the company is run in a poor business situation. The company also has a 4 of 10 profitability and growth rating with an operating margin of -9.95%, a net-margin of -6.52%, an ROE of -27.25%, an ROA of -5.94% and revenue growth (three years) of 13.20%.
First Acceptance is a retailer, servicer and underwriter of nonstandard personal automobile insurance. Based in Nashville, Tennessee, the company generates revenue from selling insurance products and related products in 17 states. It conducts servicing and underwriting operations in 13 states, and it is licensed as an insurer in 12 additional states. The company owns and operates three insurance company subsidiaries: First Acceptance Insurance Company Inc., First Acceptance Insurance Company of Georgia Inc. and First Acceptance Insurance Company of Tennessee Inc. As of Dec. 31, 2015 the company had approximately 1,400 employees according to its most recent 10-K filing.
Over the previous 10 years, First Acceptance increased its revenue per share from $5.02 million in June 2006 to a reported $9.51 million over the previous trailing 12 months, an estimated average annual increase of 6.6%. The company also increased its revenue from $249 million in June 2006 to $390.4 million over the previous trailing 12 months, an average annual increase of 4.6% over the previous 10 years.
One warning sign for investors is that First Acceptance has also increased its long-term debt from a reported -$24 million in June 2006 to -$70.1 million over the previous trailing 12 months. An estimated annual total increase of -11.3% total debt over the previous 10 years.
Below is a Peter Lynch chart that shows First Acceptance Corp is trading well below its intrinsic value.
Disclosure:Â Author does not own any shares of this company.
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