I named Fortegra Financial (FRF) as my pick in the 10 Best Stocks for 2014 contest back in Dec. Even though we have one more quarter left in the year, I can already say the story played out just as I expected.

To briefly recap why I chose FRF to begin with, financial stocks had performed extremely well in 2013. So, naturally I was watching this sector closely. FRF wasn’t a traditional bank or financial company, but both its growth and takeover potential stood out to me.

Fortegra provides payment protection and other insurance services. I liked that FRF management had worked to expand product offerings in the fastest-growing areas of insurance. I liked that Fortegra had reported good earnings every quarter since coming public in late 2010.

Although Fortegra did disappoint analysts at times, there was never a quarter where growth was not recorded, and I didn’t see why this growth wouldn’t continue. I also  liked the acquisitions FRF management had made since 2009, which I expected to keep boosting growth in the future.

While Fortegra was spending $100 million on acquisitions, I also knew it could become an acquisition target. Summit Partners owns 63% of FRF, and I knew they weren’t pleased that FRF stock was selling well below its 2010 IPO price of $11.50. Management had indicated it would consider any and all options to help boost the stock price — presumably including a selling Fortegra.

That’s exactly what happened.

On Aug. 12, Fortegra popped 40% on news that Tiptree Financial (TIPT) would acquire it for $10 a share. FRF stock immediately went from $7 to $10.

Tiptree got a heck of a deal, as Fortegra is worth more than $10 a share. FRF’s fundamentals were really starting to straighten out as Fortegra reported its second strong quarter in a row. Fortegra’s earnings grew nearly 55%, and net revenues increased 5.2%. The number of insurance premiums written jumped 20.2%, which indicated continued strong revenue performance in the future.

Taking all those numbers into account, FRF has a reasonable shot at earning $1 a share on a cash basis in 2015. So, Tiptree is getting a good deal at 10 times cash earnings. That’s not an uncommon multiple for financial stocks, but Fortegra deserves better because it doesn’t assume the credit or underwriting risk of a typical financial company.

Still, I’m very happy that my 2014 pick worked out as I expected. FRF closed at $8.27 on Dec. 31 and will finish the year with a solid 20% return.

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Hilary Kramer is the editor of GameChangers, Breakout Stocks Under $10 and High Octane Trader.