On Oct 17, 2013, we upgraded our recommendation on
) to Outperform as global expansion and acquisition strategies
are expected to help the company come up with better numbers
Why the Upgrade?
Estimates for ACE Limited have been increasing ever since it
reported second quarter results on Jul 23. ACE Limited's
second-quarter operating net income came in at $2.29 per share
that surpassed the Zacks Consensus Estimate by 19.27% as well as
the year ago numbers by 5.5%.
Following the release of second quarter results, the Zacks
Consensus Estimate for 2013 has gone up 2.1% to $8.64 per share.
However, there was no change in the Zacks Consensus Estimate for
2014. With the Zacks Consensus Estimates for 2013 going up, this
property and casualty insurer and reinsurer now has a Zacks Rank
Solid underwriting performances and growth in both the U.S. and
international operations helped the company post better operating
earnings in the second quarter of 2013. We believe the improved
commercial property and casualty pricing environment will
continue to aid results in the upcoming period.
Moreover, the acquisition initiatives of ACE Limited have always
helped the company to boost inorganic growth and expand its
global footprint. The recent approval by the Tunisian Ministry of
Finance to commence operations in Tunisia deserves particular
mention. This is because the go-ahead complements the company's
global expansion strategy, particularly expansion in the Middle
East and North Africa. The company has also been leveraging its
solid footprint in Asia and Latin America to capitalize on the
opportunities in these markets.
Further, ACE Limited boasts of a strong capital position that
provides adequate financial flexibility to the company to manage
its business and invest in its globally diversified platforms.
This also helps the company to enjoy a solid track record of
paying regular dividends that also exhibits an increasing trend
every year and engage in share repurchase programs towards
retaining investor confidence on the stock.
The company also scores strongly with the credit rating agencies.
In September, Moody's Investors Service, a wing of
) affirmed the insurance financial strength (IFS) ratings of ACE
Seguradora S.A. (ACE Seguradora), a subsidiary of ACE Limited, at
ACE Limited is scheduled to release its third quarter 2013
results on Oct 22, 2013. The Zacks Consensus Estimate for the
third quarter of 2013 is currently $2.20 per share, representing
a 9.68% improvement year-over- year.
Other Stocks to Consider
Other companies in the property and casualty insurance space that
are worth considering include
Cincinnati Financial Corp.
), with both carrying a favorable Zacks Rank #1 (Strong
ACE LIMITED (ACE): Free Stock Analysis Report
CHUBB CORP (CB): Free Stock Analysis Report
CINCINNATI FINL (CINF): Free Stock Analysis
MOODYS CORP (MCO): Free Stock Analysis Report
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