) 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.
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
AmTrust Financial Services, Inc
Endurance Specialty Holdings Ltd
Hallmark Financial Services Inc
). 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
AMTRUST FIN SVC (AFSI): Free Stock Analysis
ENDURANCE SPLTY (ENH): Free Stock Analysis
To read this article on Zacks.com click here.