On Dec 24, Zacks Investment Research upgraded
AmTrust Financial Services, Inc.
AMTRUST FIN SVC (AFSI): Free Stock Analysis
ALLIED WORLD AS (AWH): Free Stock Analysis
CINCINNATI FINL (CINF): Free Stock Analysis
ALLEGHANY CORP (Y): Free Stock Analysis
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to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
AmTrust Financial has been witnessing rising earnings estimates
on the back of strong third-quarter 2013 results and completion
of the Sagicor Europe Limited acquisition. Moreover, this
property and casualty insurer delivered positive earnings
surprises in the last 4 quarters with an average beat of 11.7%.
The long-term expected earnings growth rate for this stock is
AmTrust Financial reported third-quarter non-GAAP earnings per
share of 84 cents, surpassing the Zacks Consensus Estimate by
12.2% and the year-ago earnings of 66 cents by 25.8%.
The outperformance was aided by increase in revenues coupled with
decline in expenses.
Total revenue improved 58.5% year-over-year, driven by higher net
earned premium and investment income.
Combined ratio improved 60 basis points to 89.6% in the third
quarter of 2013.
Operating return on common equity was 21.0% comparing favorably
with 18.8% in the year-ago quarter.
Book value of $17.08 as on Sep 30, 2013 increased 10.3% from 2012
The wholly-owned subsidiaries of AmTrust Financial closed the
acquisition of Sagicor Europe Limited and its wholly-owned
subsidiaries (SEL), including Sagicor at Lloyd's Limited, from
Sagicor Financial Corporation for £56 million.
The Zacks Consensus Estimate for 2013 inched 0.3% to $3.10 per
share as most of the estimates were revised higher over the last
60 days. The current estimate is within the guidance range
provided by AmTrust Financial. For 2014, 2 of 5 estimates were
revised higher over the same time frame, lifting the Zacks
Consensus Estimate by 0.9% to $3.54 per share.
Other Stocks to Consider
Other players in the property and casualty industry, which look
attractive at current levels, include
Allied World Assurance Company Holdings, AG
Cincinnati Financial Corp.
). All the stocks share the same Zacks Rank as AmTrust