Should Value Investors Buy Protective Insurance Corp (PTVCB) Stock?

Palm Valley Capital recently released its Q3 2020 Investor Letter, a copy of which you can download here. The fund posted a return of 0.89% for the quarter, underperforming its benchmark, the S&P Small Cap 600 Index which returned 3.17% in the same quarter. You should check out Palm Valley Capital’s top 5 stock picks for investors to buy right now, which could be the biggest winners of this year.

In the said letter, Palm Valley Capital highlighted a few stocks and Protective Insurance Corp (NASDAQ:PTVCB) is one of them. Protective Insurance Corp (NASDAQ:PTVCB) provides insurance for the transportation industry. Year-to-date, Protective Insurance Corp (NASDAQ:PTVCB) stock lost 13.6% and on October 7th it had a closing price of $13.90. Here is what Palm Valley Capital said:

“Protective Insurance (ticker PTVCB) is a leading commercial trucking insurer and trades below 0.6x tangible book value. After years of challenging underwriting driven by nuclear jury awards, aggressive pricing actions have allowed the firm to inch closer to underwriting profitability. Although Protective’s investment portfolio holds commercial mortgage-backed securities, which are investments where credit issues are more likely, we believe their exposure is manageable. The controlling shareholder family appears to be looking for an exit, and the company is currently undergoing a review of strategic alternatives.”

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In Q1 2020, the number of bullish hedge fund positions on Protective Insurance Corp (NASDAQ:PTVCB) stock decreased by about 38% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t seem to agree with Protective Insurance’s growth potential. Our calculations showed that Protective Insurance Corp (NASDAQ:PTVCB) isn’t ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

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Disclosure: None. This article is originally published at Insider Monkey.