On Jun 18, Zacks Investment Research upgraded
Brown & Brown Inc.
) to a Zacks Rank #1 (Strong Buy).
ASSURED GUARNTY (AGO): Free Stock Analysis
BROWN & BROWN (BRO): Free Stock Analysis
VALIDUS HOLDING (VR): Free Stock Analysis
WILLIS GP HLDGS (WSH): Free Stock Analysis
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Why the Upgrade?
Brown & Brown has been witnessing rising earnings estimates
on the back of acquisitions. Moreover, a strong first-quarter
performance aided the upward revisions.
In order to strengthen its New York operations, last week Brown
& Brown of New York Inc. acquired some assets of The Rollins
Agency Inc. The deal is expected to enhance the risk management
capabilities of Brown & Brown and increase its clientele as
Earlier in May, Brown & Brown inked a deal with an insurance
and risk management broker Beecher Carlson Holdings Inc. in an
effort to fortify its insurance business.
Brown & Brown has always followed an inorganic route to ramp
up its growth profile. In order to expand its business, the
company acquired several entities in 2012 and is continuing with
its acquisition strategy in this year as well.
Brown & Brown posted a solid first quarter with operating net
earnings of 41 cents and delivered a positive surprise of 5.1%.
The company also exceeded the quarterly net income run rate of
$60 million and achieved quarterly internal growth rate of core
commissions and fees revenues of 10.2%.
Moreover, this insurance broker delivered positive earnings
surprises in 3 of the last 4 quarters with an average beat of
0.8%. The long-term expected earnings growth rate for this stock
The Zacks Consensus Estimate for 2013 increased 2.7% to $1.52 per
share as most of the estimates were revised higher over the last
60 days. For 2014, more than half of the estimates were revised
higher over the same time frame, lifting the Zacks Consensus
Estimate by 5.3% to $1.78 per share.
Other Stocks to Consider
Apart from Brown & Brown,
Validus Holdings, Ltd
Willis Group Holdings plc
), both carrying a Zacks Rank #2(Buy), are also worth
Assured Assured Guaranty Ltd
), a finance sector stock, carrying Zacks Rank #1 (Strong Buy)