Atlas Financial Holdings, Inc.
) hit a new 52-week high at $14.85 on Jan 2, 2014.
The momentum in this Zacks Rank #2 (Buy) stock was driven by
improved operating conditions which has enabled the company to
clock in accelerating gains in underwriting profit, lower
combined ratio and sizeable increases in gross premiums written
and net premiums earned.
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.
A strong operating performance in 2013 has led to a more than
two-fold increase in share price over the past one year.
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.
Atlas Financial is scheduled to release its fourth-quarter 2013
results on Feb 6, 2014. The Zacks Consensus Estimate for the
fourth quarter is pegged at 21 cents per share, in line with
However, valuation looks a bit stretched for Atlas Financial at
this point. The shares are trading at about 12% premium to the
industry average on a forward price-to-earnings basis and about
38% premium on a price-to-book basis. While return on equity is
7.5% higher than the industry average, return on assets was 2.5
times of the industry average.
Other Stocks to Consider
Other players in the property and casualty insurance space, which
look attractive at current levels, are
Allied World Assurance Co.
Cincinnati Financial Corp.
Fidelity National Financial, Inc.
). All these stocks carry a Zacks Rank #1(Strong Buy).
ATLAS FINL HLDG (AFH): Free Stock Analysis
ALLIED WORLD AS (AWH): Free Stock Analysis
CINCINNATI FINL (CINF): Free Stock Analysis
FIDELITY NAT FI (FNF): Free Stock Analysis
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