Compass Point Sees Positive 2Q14 Surprises For Maiden

In a report published Thursday, Compass Point analyst Ken Billingsley reiterated a Buy rating and $16.00 price target on

. In the report, Compass Point noted, “Loss ratio improvement and Diversified Reinsurance segment growth were positive surprises from 2Q14. We believe the stock remains inexpensive with the company trading at 1.0x TBVPS despite an ROATE of over 12% and a dividend yield of 3.4%. MHLD reported 2Q14 operating earnings that were in line with the consensus estimate when adjusted for higher loss costs associated with the company's E&S business that was divested in 2013. "The divested business was generating larger than anticipated CAT losses and MHLD decided to part ways as the business was not core to operations and distracted from the MHLD story. Premium growth was better than expected in the quarter, and surprisingly a large portion of the growth came from the Diversified Reinsurance segment. The combined ratio was slightly higher than our expectations, but when adjusting for the increased costs associated with the divested business the combined ratio outperformed our estimates and the prior year. More importantly, the loss ratio was better than expected (even when not adjusting for the divested business).” Maiden Holdings Ltd. closed on Wednesday at $11.80.