On Nov 26, Zacks Investment Research upgraded
Allied World Assurance Company Holdings, AG
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Allied World has witnessed rising earnings estimates on the back
of a strong third-quarter 2013. Moreover, this property-casualty
insurer has delivered positive earnings surprises in the last 4
quarters with an average beat of 32.8%. The long-term expected
earnings growth rate for this stock is 12.9%
Allied World reported its third-quarter 2013 operating net income
of $2.93 per share on Oct 23. The results surpassed the Zacks
Consensus Estimate by 37.6% and year ago earnings by 35.6%.
Earnings were primarily aided by growth across Allied World's
niche book of business which in turn was driven by a solid
underwriting performance and an attractive rate environment.
Allied World's lower loss ratio drove a year-over-year
improvement of 390 basis points (bps) in combined ratio to 84.2%
in the reported quarter.
Allied World exited the third quarter with cash and cash
equivalents of $1.2 billion that surged 39.9% from the 2012-end
With respect to share buyback, Allied World spent $40.6 million
to repurchase 0.43 million shares in the third quarter.
The Zacks Consensus Estimate for 2013 increased 6.8% to $10.37
per share over the last 30 days as 4 of 6 estimates were raised.
For 2014, same numbers of estimates moved north lifting the Zacks
Consensus Estimate by 1.9% to $7.61 per share over the same time
Other Stocks to Consider
Other property and casualty insurers that look attractive at
current levels include
Aspen Insurance Holdings Ltd.
Hallmark Financial Services Inc.
). All these stocks carry the same Zacks Rank as Allied
ASPEN INS HLDGS (AHL): Free Stock Analysis
ALLIED WORLD AS (AWH): Free Stock Analysis
HALLMARK FINL (HALL): Free Stock Analysis
ALLEGHANY CORP (Y): Free Stock Analysis
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