On Mar 12, Zacks Investment Research upgraded
Atlas Financial Holdings, Inc.
) to a Zacks Rank #1 (Strong Buy) owing to solid fourth quarter
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Why the Upgrade?
Atlas Financial posted strong fourth-quarter 2013 financial
results on Mar 10, 2014. The results included a positive earnings
surprise of 4.8%. With this, the company delivered positive
earnings surprises in two of its last four reported quarters with
an average beat of 4.6%. Following the earnings release, shares
of this property and casualty insurer spiked nearly 9.5% to close
at $14.37 on Mar 11.
Atlas Financial reported fourth-quarter net operating earnings
per share of 22 cents, escalating 46.7% year over year. The
number also beat the Zacks Consensus Estimate by a penny.
Bottom-line growth was largely attributable to the company's
revenue accretion. Significant improvement in net premiums earned
drove the top line, which surged 72.2% year over year. Total
revenue also exceeded the Zacks Consensus Estimate by 20.7%.
Atlas Financial is witnessing operating synergies owing to its
well-managed vertical expansion throughout its geographic base,
established over the past two years. The company's acquisition of
Gateway, in early 2013, has also contributed to top-line growth.
We expect the company's 2014 earnings to gain from insurance
price strengthening and increasing business. It is also worth
noting that Atlas Financial is not materially exposed to
catastrophic risk which eliminates potential earnings volatility.
The Zacks Consensus Estimate for 2014 is currently pegged at 96
cents per share, while for 2015 it is pegged at 20 cents a share.
Other Insurers Worth a Look
Investors interested in the property and casualty insurance
industry may also consider some other top-ranked stocks like
American Financial Group Inc.
AmTrust Financial Services, Inc.
). All these stocks sport the same Zacks Rank as Atlas