AII

American Integrity screens as one of the cheapest profitable names you'll find: 3.4x trailing P/E, 1.4x P/S, and — the more honest lens for an insurer — roughly 1.1x book ($337M equity vs. $377M market cap). Behind that price is a genuinely improving business. FY2025 revenue grew 35.3% to $276M and net income jumped 150.7% to $99.6M, driving a 36.0% net margin and a 29.6% ROE. The balance sheet is pristine for the sector: essentially no debt (long-term debt just $206K), $204M cash, and equity that more than doubled (+107.5%) as retained earnings compounded to $229M. Management is explicit about the driver — the December 2022 Florida legislative reforms (curbing assignment-of-benefits abuse, attorney fee multipliers, litigation) have structurally lowered claims costs, and AII is opportunistically scaling via Citizens take-outs (68,844 policies in 2024, 33,867 in 2025) that carry no upfront acquisition cost and sit under the existing reinsurance treaty.

The reason the market pays only 3.4x earnings is the same reason to size any position carefully: this is a near-monoline, single-state, catastrophe-exposed insurer. Florida is 96.3% of direct premiums written and 93.7% of policies in force. Management flags that results are 'highly seasonal' around the June 1–November 30 hurricane season, and that catastrophe excess-of-loss reinsurance (renewing every June 1) materially swings results and reinsurance pricing. FY2025's blistering margin almost certainly reflects a benign storm year layered on top of the reform tailwind — one major landfall could erase a year or more of earnings, so trailing EPS overstates normalized power. The carrier carries only a Demotech A / Kroll BBB+ rating and the holdco is sub-investment-grade at BB+.