On Jan 14, Zacks Investment Research upgraded
Assured Guaranty Ltd
) to a Zacks Rank #1 (Strong Buy).
ASSURED GUARNTY (AGO): Free Stock Analysis
AMER INTL GRP (AIG): Free Stock Analysis
CIGNA CORP (CI): Free Stock Analysis Report
CNO FINL GRP (CNO): Free Stock Analysis
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Why the Upgrade?
Assured Guaranty has witnessed rising earnings estimates on the
back of solid results. This multiline insurer delivered positive
earnings surprises in 3 of the last 4 quarters with an average
beat of 27.9%.
In the last reported quarter Assured Guaranty's operating
earnings surpassed the Zacks Consensus Estimate by 4.9%. The
outperformance was largely aided by share buybacks and lower loss
Loss expense plunged 44% year over year to $56 million, largely
attributable to decline in U.S. residential mortgage-backed
securities (RMBS) losses. This in turn led to total expense
declining nearly 22% year over year.
Assured Guaranty's active share repurchase program also
complements its bottom line. Till mid¬-Nov 2013, Assured Guaranty
has bought back 12.5 million of its shares for $264 million under
the $315 million share repurchase authorization. The board
concurrently approved another share repurchase program of $400
Long-term borrowings of Assured Guaranty trimmed 2% to $819
million at third quarter-end from 2012-end level. Adjusted book
value per share increased 5% from the 2012-end level to $49.55 as
on Sep 30, 2013 largely driven by share buybacks.
Since the company went public in 2004, Assured Guaranty has
delivered positive earnings in each quarter despite all odds.
The Zacks Consensus Estimate for 2013 and 2014 increased 1% to
$3.18 per share and 1.5% to $3.77 per share, respectively, over
the last 60 days. These estimates represent a year-over-year
increase of 13.1% for 2013 and a decline of 12.8% for 2014.
We wait to see if the company manages to deliver another quarter
of positive earnings surprise when it reports its fourth quarter
results soon. The Zacks Consensus Estimate for the fourth quarter
is currently pegged at 66 cents, translating into a
year-over-year decline of 29%.
Other Stocks to Consider
Other multiline stocks worth considering include
American International Group, Inc
CNO Financial Group, Inc.
). All these stocks share the same Zacks Rank as Assured