Dutton Associates Announces Investment Opinion: 21st Century Rating Raised to Buy in Update by Dutton Associates

After the release of 2Q results, we lowered TCHC's rating from Strong Buy to Strong Speculative Buy and lowered the price target from $16.00 to $9.00. However, in view of maintaining the quarterly dividend rate of $0.18, its resulting dividend yield of over 10%, and after analysis of 21st Century's results in comparison with comparable peer groups, we now raise the rating to Buy and raise the price target to $12.00 per share. On pages 7 and 8 of our report we compare TCHC to four insurance companies, three larger and one similarly sized. In all regards, 21st Century is relatively undervalued. Assuming the maintenance of the $0.18 quarterly dividend, purchase of 21st Century's common stock will provide a 10.7 % current yield on the expected $0.72 dividend. Management's decision to diversify away from dependency upon property, auto, and mobile home insurance, while increasing its general liability underwriting, is being accomplished. It continues to diversify its geographical underwriting areas, becoming qualified in states outside of Florida, and is now underwriting commercial general liability coverage as an admitted carrier in Louisiana, Texas, and Alabama, for more than 300 classes of business, including special events. It also operates as an approved (non-admitted) carrier in California, Georgia, Kentucky, Virginia, South Carolina, Missouri, and Arkansas, offering the same general liability products. The goal for 21st Century is to become a national underwriter, and the diversification of its general liability underwriting is a major step toward this goal.

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SOURCE: 21st Century Holding Company

Dutton Associates John Dutton, President, 916-960-0624