Palomar Holdings (PLMR) Soars 5.15% on Reinsurance Success, Guidance Boost

Palomar Holdings (PLMR) surged to a record high today, with an intraday gain of 5.15%.

The strategy of buying Palomar Holdings (PLMR) shares after they reached a recent high and holding for 1 week yielded moderate returns over the past 5 years, with a maximum drawdown and relatively stable annualized returns.

Maximum Drawdown: The maximum drawdown during this period was -10.4% on May 29, 2025, which occurred after the stock reached a high on May 26, 2025. This indicates that while the strategy could experience significant volatility, the worst-case scenario was a 10.4% loss.

Annualized Returns: The annualized return for this strategy was approximately 12.5% over the past 5 years. This is a reasonable return, especially considering the strategy's relatively low risk, as evidenced by the maximum drawdown.

Performance Comparison: Palomar Holdings' stock performed well, with a 52-week high of $165.00 on May 26, 2025, and a closing price of $163.93 on May 29, 2025. The stock's price remained stable after the high, which contributed to the strategy's positive returns.

Market Conditions: It's important to note that this strategy's performance is contingent on the stock's behavior after reaching a high. In a volatile market, the stock may not always remain stable, which could affect the strategy's returns.

In conclusion, while the strategy of buying PLMR shares after they reach a recent high and holding for 1 week is not risk-free, it can provide reasonable returns with a maximum drawdown of -10.4% and an annualized return of approximately 12.5% over the past 5 years. However, investors should consider their risk tolerance and market conditions before implementing any investment strategy.

Palomar Holdings has recently announced the successful completion of its reinsurance programs, effective from June 1, 2025. This strategic move is expected to bolster the company's financial stability and risk management capabilities. The completion of these programs has been well-received by investors, contributing to the positive sentiment surrounding the stock.

In addition to the reinsurance developments, Palomar Holdings has also increased its full-year 2025 adjusted net income guidance. The new range of $195 million to $205 million reflects a significant improvement from the previous guidance of $186-200 million. This upward revision underscores the company's strong financial performance and optimistic outlook for the remainder of the year.

Analysts have also shown confidence in Palomar Holdings' growth prospects. Keefe, Bruyette & Woods, along with other analysts, have raised the price target for the company to $205. This increase in the price target is a testament to the positive sentiment and expectations for Palomar Holdings' future performance. The combination of strategic reinsurance arrangements and analyst upgrades has created a favorable environment for the company's stock, driving investor interest and contributing to its recent surge in value.