On May 9, Zacks Investment Research upgraded
AmTrust Financial Services Inc.
) to a Zacks Rank #1 (Strong Buy) from a Zacks Rank #3 (Hold).
Why the Upgrade?
AmTrust Financial has been experiencing rising earnings
estimates on the back of robust first-quarter 2014 results.
Consistently improving organic growth, diversified product
portfolio and healthy capital position have also been fueling
improved market trends.
Additionally, this specialty property-casualty insurer
outperformed the one-year Nasdaq index that had projected growth of
18.5%, by yielding a return of 46.7%. AmTrust Financial also
delivered positive earnings surprises in the last 4 quarters with
an average beat of 21.8%.
On May 1, AmTrust Financial reported first-quarter 2014
operating earnings per share of $1.24, which outpaced the Zacks
Consensus Estimate of 94 cents by about 33.3% as well as the
year-ago quarter figure of 74 cents by 67%.
The year-over-year top -line growth of 89% stemmed from net
earned premiums that increased two fold, 50% ascent in service and
fee income and 57% growth in investment income. Despite higher
underwriting and acquisition expenses, combined ratio and margins
Meanwhile, AmTrust Financial's prudent risk and debt management
is reflected by its long-term leverage that improved by180 basis
points from 2013-end to 26.2% at Mar 2014-end. This is particularly
impressive given the higher number of acquisitions of late. An
appreciated cash position, book value per share and return on
equity (ROE) further paved the way for a 43% dividend hike and
continue to inspire investors and ratings agencies.
Based on AmTrust Financial's fundamental strength and prudent
capital management, the Zacks Consensus Estimate for 2014 rose 6.8%
to $4.22 per share in the last 30 days. Meanwhile, the estimate for
2015 moved north by 5% to $4.85 during the same period.
Moreover, the Most Accurate Estimate for AmTrust Financial's
2014 and 2015 earnings stands at $4.71 and $5.08 a share, resulting
of +11.6% and +4.7%, respectively. Furthermore, no downward
revision in estimates was witnessed for both the years.
Other Stocks to Consider
Apart from AmTrust Financial, other top-ranked insurers in the
Aspen Insurance Holdings Ltd.
Atlas Financial Holdings Inc.
Endurance Specialty Holdings Ltd.
). All these stocks sport the same Zacks Rank as
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
ATLAS FINL HLDG (AFH): Free Stock Analysis
AMTRUST FIN SVC (AFSI): Free Stock Analysis
ASPEN INS HLDGS (AHL): Free Stock Analysis
ENDURANCE SPLTY (ENH): Free Stock Analysis
To read this article on Zacks.com click here.