Palomar Holdings CEO Sells Over $668K in Company Stock

Palomar Holdings, Inc. recently saw its CEO and Chairman, Mac Armstrong, divest a notable portion of his shares in the company, as revealed by recent regulatory filings. Armstrong, who also holds a director position, sold a total of 7,000 shares through a series of transactions.

The sales took place on September 23, 2024, generating over $668,000 in proceeds. The shares were sold at various prices between $94.81 and $95.88, with a weighted average selling price ranging from approximately $95.47 to $95.84. These transactions were documented in a Form 4 filing with the Securities and Exchange Commission.

It is important to note that Armstrong’s sales were conducted indirectly via the Armstrong Family Trust. After these sales, the CEO retains a significant stake in Palomar Holdings, holding 47,247 shares directly, which includes 2,428 shares acquired through the company’s 2019 Employee Stock Purchase Plan.

Palomar Holdings operates as a specialty insurance provider, focusing on fire, marine, and casualty insurance, and is based in La Jolla, California. Although the CEO’s sale marks a noteworthy shift in his investment in the company, the specific motivations behind this decision have not been publicly explained.

Insider trading activity is often closely monitored by investors, as such actions may provide insight into executives’ perspectives regarding the company’s current valuation and future outlook. However, it is crucial to acknowledge that insider transactions can stem from various personal financial factors and do not necessarily reflect changes in the company’s fundamentals.

In other developments, Palomar Holdings reported the successful closure of an offering of 1.2 million primary shares, which generated $115 million in proceeds to fund strategic financial initiatives, including the acquisition of First Indemnity of America, a surety insurer.

Additionally, the company announced the appointment of David Sapia as Executive Vice President, Head of E&S Casualty. With over 30 years of experience, Sapia is expected to lead the growth of the company’s E&S casualty division.

From an analyst perspective, JPMorgan recently raised its price target for Palomar Holdings’ stock to $94.00 while maintaining a neutral stance. Other firms, including Keefe, Bruyette & Woods, Piper Sandler, and Truist Securities, have also revised their price targets upwards, attributing the changes to improved operating income guidance and the successful completion of a reinsurance program.

Furthermore, Evercore ISI adjusted its price target to $99, retaining an In Line rating. This revision mirrors Palomar’s recent financial growth, characterized by substantial improvements and better-than-expected expense ratios. The firm has also increased its forward estimates for Palomar by 7-9%, indicating expectations of higher retained premiums and extended expense leverage into 2025.

Lastly, Palomar has appointed Tim Carter as Chief People Officer and Rodolphe “Rudy” Herve as Chief Operating Officer, adding to the leadership team expected to enhance the company’s growth strategies and operational capabilities.

In summary, Palomar Holdings, Inc. is attracting attention not only for insider transactions but also for its overall financial performance and market positioning. The company has a market capitalization of $2.52 billion and a P/E ratio of 24.61, which is considered low given its near-term earnings growth potential. With a reported revenue increase of 27.81% over the last year and quarterly growth of 44.99%, Palomar’s financial expansion appears promising. Analysts predict profitability for the year, supported by a robust operating income margin of 28.79% and a gross profit margin of 32.28%.

For detailed insights into Palomar’s financial health and future prospects, additional analysis and tips are available for interested investors.