On Oct 5, Zacks Investment Research upgraded
Aspen Insurance Holdings Ltd.
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Aspen has been experiencing rising earnings estimates on the
back of improved market trends post its second-quarter 2013
results. Moreover, strong capitalization and reduced pricing
pressure served as impressive factors.
Additionally, this property-casualty insurer delivered
positive earnings surprises in 3 of the last 4 quarters with an
average beat of 34.2%. Aspen also outperformed the one-year
S&P index, which posted a 15.7% increase against the healthy
return of 16.6% clocked by the company.
On Jul 24, Aspen reported second-quarter 2013 operating
earnings per share of 63 cents, which lagged the Zacks Consensus
Estimate of 67 cents and the year-ago quarter number of
While year-over-year growth of 5.3% in net written premiums
boosted the top line, higher loss, loss adjusted and policy
acquisition expenses reduced the underwriting income. Net
investment income also decreased 60% over the prior-year quarter.
Consequently, combined ratio, book value per share and return on
equity (ROE) deteriorated from the year-ago quarter.
However, in the last couple of months, Aspen's strategic focus
on optimizing its business portfolio and initiatives to expand in
the U.S. have been showing results. Alongside, prudent risk
management and efficient deployment of excess capital reflect a
healthy capital position and score well with the ratings
agencies. These factors should help Aspen achieve ROE of 10% in
2014, auguring a durable long-term growth potential.
Based on Aspen's fundamental strength and capital management,
the Zacks Consensus Estimate for 2013 rose 5.4% to $3.14 per
share in the last 60 days. Moreover, the Most Accurate Estimate
for Aspen's 2013 earnings stands at $3.95 a share, resulting in
Meanwhile, the estimate for 2014 remained intact at $3.27 in
the last 60 days. Furthermore, no downward revision in estimates
was witnessed for both the years.
Other Stocks to Consider
Apart from Aspen, other outperforming insurers in the industry
Allied World Assurance Co. Holdings AG
Global Indemnity Plc
). All these stocks carry a Zacks Rank #1 (Strong Buy).
ASPEN INS HLDGS (AHL): Free Stock Analysis
ALLIED WORLD AS (AWH): Free Stock Analysis
GLOBAL INDEMNTY (GBLI): Free Stock Analysis
MONTPELIER RE (MRH): Free Stock Analysis
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