Allied World Upped to Strong Buy - Analyst Blog

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On Nov 26, Zacks Investment Research upgraded Allied World Assurance Company Holdings, AG ( AWH ) 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 level.

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 frame.

Other Stocks to Consider

Other property and casualty insurers that look attractive at current levels include Alleghany Corp. ( Y ), Aspen Insurance Holdings Ltd. ( AHL ) and Hallmark Financial Services Inc. ( HALL ). All these stocks carry the same Zacks Rank as Allied World.



ASPEN INS HLDGS (AHL): Free Stock Analysis Report

ALLIED WORLD AS (AWH): Free Stock Analysis Report

HALLMARK FINL (HALL): Free Stock Analysis Report

ALLEGHANY CORP (Y): 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: AHL , AWH , HALL , Y

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