Oxbridge Re Holdings Limited (NASDAQ: OXBR, $OXBR) stock is in rally mode, surging by over 23% since May. But the better news is that momentum to the upside appears to be well established, with the stock closing higher in the past eight trading sessions. While impressive, especially in the face of weak broader markets, investors following the OXBR story expect significantly higher gains, with an asset-justified 131% jump in their crosshairs. (*share price referenced at press time, 6/7/22, 2:58pm EST, $5.37)

That bullish expectation, by the way, isn't based on hype but rather on the fact that Oxbridge's stake in Oxbridge Acquisition Corp (NASDAQ: OXAC, $OXAC) alone can support a share price significantly higher than its current. In fact, OXBR's 49.6% interest in that $145.19 million company is an obvious reason for OXBR shares to score at least $12.45 on a pure intrinsic basis. However, factoring in other business interests, a strong balance sheet, and a tight trading float, a more appropriate OXBR valuation , with all the assets and inherents considered, stretches as high as $17. 

Still, while indeed bullish, even that lofty target may be conservative, and the evidence supports that presumption. It shows that OXBR's tangible book-value share price, with just its OXAC interest, supports the mentioned $12.45 price tag, substantially higher than its current $5.37 price. But that takes into account only its investment interest in OXAC.

There's considerably more value in OXBR itself, with roughly $5 million in cash, other revenue-generating business interests, no debt, and a capital structure with only about 5.78 million shares outstanding. Those metrics already support OXBR's own impressive market cap of roughly $32 million and a share price of $5.37. But that $5.37 price should be ringing alarm bells. Moreover, attracting attention. Why? Because its share of its OXAC interest amounts to more than $72 million today and exposes a disconnect ripe for the taking. And with OXAC looking primed to break higher from a technical perspective, that dollar interest could increase appreciably.

That's not all. Activist investors are taking an interest, which could add to the bullish momentum when that fact gets more widely known.

Activist Investors Take Aim At Valuation Disconnect

As it is, many retail investors in OXBR may not even realize they are in excellent investing company alongside activist investor David Lazar. He holds a roughly 8% interest in OXBR. That's an interest that shouldn't go unnoticed or underappreciated. Why? Because Lazar is no stranger to success. Quite the opposite.

Lazar and his investment fund have proven success in monetizing its investments by making small companies big. Moreover, specializing in reverse mergers and other event-driven opportunities makes sense for them to take an interest in OXBR, noting the scalable business structure. But the better consideration from an investor's perspective is knowing that Lazar and his team are in OXBR for a reason, and if history repeats, investors may want to buckle up for an exciting ride. Here's why.

Lazar owned close to 9.9% of the holding company IKONICS ($IKNX). And that stake was made when things were pretty quiet on the IKNX front. However, things didn't stay quiet for long. After Lazar's arrival, IKNX announced a deal to merge with Terawulf, a transaction that sent IKNX stock soaring from $4.00 to $44.00, which now supports the surviving $WULF's current $291 million valuation. Can the same happen at OXBR? Well, history says yes.

Actually, the two companies and stories parallel nicely. Like IKNX at the time, OXBR is a relatively quiet company, which until June was churning between the $4.70 - $4.90 range. But, similar to the slow and steady rally behind WULF at the time, the same is happening at OXBR. As noted, shares in Oxbridge are higher by about 23% than a month ago. And as happened at WULF, investors may be starting to pay attention to the possibilities in play at OXBR, and they would be wise to do so, especially after Lazar and his team inspired a 1000% gain at WULF. 

Remember, activist investors don't like dead money. Worse, they hate to lose it. So, at least to many, connecting the dots indicates that Lazar may see a similar value and opportunity in OXBR. And with his history of making small companies bigger, investing alongside may be a prudent course of action.

Better Positioned Than Ever For Growth

Frankly, a compelling case can be made that OXBR is appreciably undervalued without that outside interest. But there's no reason to do so. OXBR should be valued for its totality, not a diminishing hypothetical.

In that respect, both OXBR and OXAC are better positioned for organic growth than at any time in their history. And while weaker broader markets may have kept a lid on respective rallies, sentiment will change, and those companies that can justify higher valuations with risk to the downside mitigated are likely to earn the lion's share of investment attention. Still, OXBR's 23% gain in roughly 30 days is an impressive stat. Moreover, if that's what happened with a "lid," the upside without one could unleash massive upside pressure.

There are reasons to be optimistic about that happening. OXBR is strong. From a capital structure perspective, OXBR's low float of about 5.78 million shares and roughly $1 in cash per share cash expose a company that could attract consolidation interest sooner than later. Remember, that's Lazar's specialty, and maybe part of the game plan.

Keep in mind, too, that while the "getting bigger faster" proposition through Lazar is attractive, OXBR's opportunity to grow organically from multiple shots on revenue-generating goals is too. They invested about 50% of their equity through its reinsurance subsidiary, but smartly and in a way that mitigates risk. As a result, despite Oxbridge Re contributing only about 34.7% of the risk capital, the investment maximizes its earnings potential by owning approximately 49.6% and 63.1% of the sponsor's ordinary shares and preferred shares. Additional benefit can accrue through the Class B shares and private placement warrants respective to the investment vehicle. 

In other words, they made a great deal and set themselves, and its investors, for massive risk-mitigated upside.

A Bullish Proposition, Act Quickly

Indeed, the case for investment consideration in OXBR is compelling, with simple to understand "sum of its parts" calculations showing a valuation disconnect that is should not be ignored. Obviously, the trading pattern over the past eight days indicates investors aren't. And if retail isn't part of that move, they may want to consider joining. Quickly.

Remember, while OXBR is an under-the-radar company with massive near-term potential today, the ticker is starting to make it onto investor screens. Thus, the proposition is more than attractive; it's timely, especially knowing big money has entered the game.

Hence, the investor's considering the OXBR investment proposition today, supported by compelling reasons to do so, get more than a ground floor price; they also get an opportunity to invest, at an early stage, alongside one, or some, of the financial sector's brightest minds. That bonus, by any measure, is an excellent position to exploit. And through OXBR, it's one they can.

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