Upping My Investment in UVE

Over the weekend I reviewed my portfolio and decided to up my stake in Universal Insurance Holdings (UVE-AMEX). The Group's principal activity is to provide property and casualty insurance. It performs various aspects of insurance underwriting, distribution and claims. It markets and distributes its products and services, primarily in Florida.

I've written about UVE before and have been a long time shareholder for quite some time. Not long ago I had sold some of my shares for the capital gains, but now that I've reviewed the stock, I've decided to buy more. I've always liked their dividend payout and currently it is running at 12.94% on the recent share price of $6.19. Not too many places right now you can get a 12% plus rate of return.

Another factor in my decision was an article I read recently which argued that one of the most important metrics for stock picking, is insider ownership. I thought the author made a very good argument for investing in stocks with high insider ownership. That being said, UVE, which has been a great investment for me so far, has inside ownership of over 50% on top of their high dividend payouts. They have also expanded operations outside the state of Florida, which could indicate prospects for future capital gains.

Bottom line, if the insiders are willing to tie up so much of their money in the company, then I'm thinking it probably wouldn't hurt for me to keep some money working with them.