On Mar 19, Zacks Investment Research upgraded
Aspen Insurance Holdings Ltd
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Aspen Insurance has been witnessing rising earnings estimates on
the back of strong fourth-quarter 2012 results. Moreover, this
property and casualty insurer delivered positive earnings
surprises in all four quarters of 2012 with an average beat of
Additionally, Aspen Insurance and
Goldman, Sachs & Co
) entered into an Accelerated Share Repurchase agreement whereby
Aspen will pay $150 million to Goldman in exchange of its shares.
Further, from Jan 1, 2013 through Feb 26, 2013, Aspen bought back
$47 million shares. Aspen is left with $335 million under
its $500 million share repurchase authorization.
Following a through review of businesses, management decided to
lower its wind and earthquake exposure within the U.S. property
insurance account. This would free up more than $200 million of
capital that could be deployed to maximize shareholder value.
Aspen Insurance expects to generate operating return on equity of
10% in 2014. It delivered 8.5% in return on equity in 2012.
Aspen Insurance reported its fourth-quarter results on Feb 7.
Non-GAAP loss per share came in at 15 cents, better than the Zack
Consensus Estimate of a loss of $1.21 per share.
Gross written premiums improved 25.6% year over year to $576.2
million in the fourth quarter. A surge of 40.2% in gross written
premiums at the Insurance segment fueled the improvement.
Combined ratio improved 1710 basis points year over year to
107.1% in the fourth quarter.
The Zacks Consensus Estimate for 2013 increased 6.8% to $2.97 per
share as 3 of 6 estimates were revised higher over the last 60
days. Also for 2014, 3 of 6 estimates moved up, pushing the Zacks
Consensus Estimate higher by 7.6% to $3.13 over the same time
Other Stocks to Consider
Other property and casualty insurers like
Cincinnati Financial Corp
Montpelier Re Holdings Ltd.
) carry a Zacks Rank #1 (Strong Buy) and are worth noting.
ASPEN INS HLDGS (AHL): Free Stock Analysis
CINCINNATI FINL (CINF): Free Stock Analysis
GOLDMAN SACHS (GS): Free Stock Analysis
MONTPELIER RE (MRH): Free Stock Analysis
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