Arthur J. Gallagher & Co.
) announced acquisition of Foundation Strategies, Inc., thereby
giving a boost to its inorganic growth story. However, the terms of
the transaction remain undisclosed.
Texas based Foundation Strategies, an employee benefits broker and
consultant specializes in overall implementation of employee
benefits plans and insurance management service. Arthur J.
Gallagher's employee benefits operations in the south central
region stand to gain from addition of Foundation Strategies in its
Arthur J. Gallagher & Co. is well known for pursuing
acquisitions that help in expanding its business. While the latest
acquisition marks the first one in the present quarter, the company
had made ten acquisitions in second-quarter 2014. It compares
favorably with nine acquisitions made in the first quarter with
annual revenue of $17.8 million.
Notably, Arthur J. Gallagher & Co.'s strong cash position as
well as solid retained earnings cushions its acquisitions, thereby
resulting in steady earnings generation.
Arthur J. Gallagher & Co. is scheduled to report second-quarter
2014 earnings on Jul 29, 2014. The Zacks Consensus Estimate for
second quarter is currently pegged at 72 cents on revenues of $964
million. While the top line represents a year over year increase of
38.5%, bottom line translates to an improvement of 4.3%.
With respect to earnings performance, Arthur J. Gallagher & Co.
delivered positive earnings surprises in two of last four quarters
with trailing four-quarter average surprise of 12.73%. Currently,
this insurance broker has a Zacks Rank #3 (Hold), which increases
the predictive power of positive surprise. However, when combined
with an Earnings ESP of 0.00%, it makes surprise prediction
Insurance brokers are increasingly resorting to inorganic growth
strategies to bolster prospects. Aon US Holdings, Inc., a
) completed its acquisition of StoneRiver National Flood Services,
Inc. last week while
Brown & Brown Inc
) has taken over Gaston & Associates in mid-June. Last month,
another insurance broker,
Validus Holdings, Ltd
) announced its intention to buy Western World Insurance for $690
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
GALLAGHER ARTHU (AJG): Free Stock Analysis
AON PLC (AON): Free Stock Analysis Report
BROWN & BROWN (BRO): Free Stock Analysis
VALIDUS HOLDING (VR): Free Stock Analysis
To read this article on Zacks.com click here.