BGB Securities Reiterates Buy Rating, $27 PT on American Safety Insurance Holdings

In a report published Friday, BGB Securities reiterated its Buy rating and $27.00 price target on American Safety Insurance Holdings Ltd.

. BGB Securities noted, “ASI announced its expected exposure to 4Q12 CAT losses of between $6M and $7M after tax. The losses relate to Hurricane Sandy and due to the size and nature of the storm are impacting all three segments; E&S, ART, and Assumed Reinsurance. The top end of the CAT range equates to a loss of approximately $0.76 per share pre-tax and $0.68 after-tax. This equates to approximately 13.3% of additional loss ratio points. We now estimate the 4Q12 loss ratio to be 78.2% for the quarter. We maintain our BUY rating and our price target of $27. Our price target is approximately 0.75x our 2013E diluted BVPS of $36.24 with a 2013E ROAE of 6.3%. We believe the future P/B multiple for ASI will rise given the market's anticipation of price strengthening and improving expense ratios.” American Safety Insurance Holdings Ltd. closed on Thursday at $18.85.