Arthur J Gallagher & Co.
) announced that it has priced an offering of 19 million shares
of its common stock at a price of $43.25 per share. Additionally,
it also declared that the underwriters may purchase an additional
2.85 million shares of its common stock within a 30-day option.
ACE LIMITED (ACE): Free Stock Analysis Report
GALLAGHER ARTHU (AJG): Free Stock Analysis
ERIE INDEMNITY (ERIE): Free Stock Analysis
MARSH &MCLENNAN (MMC): Free Stock Analysis
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The offering is expected to close on April 16, 2014, subject to
Arthur J Gallagher & Co. intends to use the net proceeds from
the offering to fund a part of its acquisition of Wesfarmers
insurance brokerage operations. The remaining proceeds will be
used to repay the borrowings under the company's line of credit
as well as for general corporate purposes, including other
As of 2013, total number of shares outstanding for Arthur J
Gallagher & Co. was 135.8 million. With this issuance the
share count will rise to approximately 155 million, weighing on
the earnings per share of the company.
Arthur J Gallagher reported first-quarter 2014 operating net
earnings of 39 cents a share that outperformed the Zacks
Consensus Estimate by 52%. The also result increased from the
prior-year quarter number by 22%. The Zacks Consensus Estimate
for 2014 is currently pegged at $2.41 per share. However, this
number may be revised downward as analysts incorporate the new
issuance in their model.
Additionally, Arthur J Gallagher & Co. carries a Zacks Rank
#3 (Hold) and its Earnings ESP is positive, indicating the stock
is likely to deliver a positive earnings surprise in the second
quarter of 2014.
Other Stocks to Consider
Some top-ranked stocks worth mentioning in the insurance space
Erie Indemnity Co.
Marsh & McLennan Companies, Inc.
). While ACE Limited sports a Zacks Rank #1 (Strong Buy), Erie
Indemnity and Marsh & McLennan both carry a Zacks Rank #2