ACE Limited Strengthens Thai Presence with Samaggi Buyout - Analyst Blog

By
A A A

ACE Limited ( ACE ) along with its local partner, has acquired a 32.17% stake in The Siam Commercial Samaggi Insurance PCL (Samaggi). The acquisition - carried out through a mandatory tender offer - was in compliance with Thai regulations. The recent buyout is in addition to the 60.86% stake that was acquired by ACE from Siam Commercial Bank in April. ACE now owns 93.03% in Samaggi. The acquisition of Samaggi, a general insurance company in Thailand, is expected to strengthen ACE's grip on commercial, auto and personal accident insurance and foothold in Thailand and Southeast Asia.

Inorganic Story

ACE Limited has always considered acquisitions as a prudent strategy to boost growth and expand the global footprint. Over the years, ACE Limited made significant acquisitions to widen its global presence and diversify its product offerings. However, ACE Limited was quiet for nine months since it acquired Mexico-based ABA Seguros, a property and casualty insurer, for $690 million lastMay. The company's acquisitions were confined to the first half of last year. Fianzas Monterrey, a leading surety lines company in Mexico was acquired for $293 million in cash in April and Indonesia's PT Asuransi Jaya Proteksi was taken over for $100 million in cash in January. The acquisitions are boosting ACE's premiums and taking it closer, a step at a time, to its long-term ROE goal of 15%.

Backed by Solid Liquidity

ACE Limited has been strengthening its balance sheet, which is enough to travel the inorganic path and perk up operational performance.  While cash balance improved 46% over the 2013 level, retained earnings grew 5.3%. ACE Limited has also been effectively lowering its leverage ratios.

Zacks Consensus Estimate

ACE Limited has been witnessing rising estimates on the strength of solid earnings results, and efforts to distribute more profits with shareholders. The Zacks Consensus Estimate for 2014 and 2015 moved up as most of the estimates were raised over the last 60 days. It increased 2.5% to $8.97 for 2014 and 1.3% to $9.25 for 2015. The expected long-term earnings growth rate is 10%.  The property and casualty insurer carries a Zacks Rank #2 (Buy).

Other Stocks to Consider

Investors interested in property and casualty industry can take a look at AmTrust Financial Services, Inc . ( AFSI ), Endurance Specialty Holdings Ltd . ( ENH ) or Hallmark Financial Services Inc . ( HALL ). All these stocks sport a Zacks Rank #1 (Strong Buy).


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

ACE LIMITED (ACE): Free Stock Analysis Report

HALLMARK FINL (HALL): Free Stock Analysis Report

AMTRUST FIN SVC (AFSI): Free Stock Analysis Report

ENDURANCE SPLTY (ENH): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: ACE , HALL , AFSI , ENH

Zacks.com

Zacks.com

More from Zacks.com:

Related Videos

Stuck
Stuck                               
Yoga Surfer
Yoga Surfer                         

Stocks

Referenced

Most Active by Volume

89,851,277
  • $17.05 ▲ 0.12%
61,694,953
  • $39.05 ▲ 1.03%
61,622,467
  • $102.64 ▲ 1.56%
56,476,509
  • $3.48 ▼ 1.14%
49,282,352
  • $5.31 ▲ 3.91%
37,301,083
  • $87.17 ▼ 3.03%
36,192,897
  • $78.29 ▲ 1.94%
33,401,171
  • $38.83 ▼ 1.89%
As of 9/23/2014, 04:15 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com