Rising estimates resulting from an excellent quarterly
performance have sent this insurer to Zacks #1 (Strong Buy) rank
again and it is the 'Bull of the day'.
About the Company
Alleghany Corporation (
is a multi-line insurance company, operating through its
subsidiaries, Transatlantic Holdings (reinsurer), RSUI Group
(underwriter of property and liability specialty Insurance),
Capitol Transamerica Corporation (underwriter of small commercial
property, casualty and surety insurance) and Pacific
Compensation Corporation (underwriter of workers' compensation
Excellent Second Quarter Results
The company reported its second-quarter 2013 results on August 5,
2013. Operating net earnings of $6.78 per share were
substantially higher than the Zacks Consensus Estimate of $4.25
The company has delivered a positive surprise in all of the
previous four quarters, with an average quarterly surprise of
Better than expected earnings were a result of increase in net
investment income (up 10.5% year over year) and lower costs and
A decline in net loss and loss adjustment expenses, other
operating expenses and corporate administration also aided the
The company spent $40.4 million in share buybacks during the
first two quarters of the year. It had $241.9 million
remaining on its currently effective $300 million share
Zacks consensus estimate for the current quarter has increased to
$4.53 per share from $4.11 per share 60 days ago and similarly,
the estimate for the current year has gone up to $30.42 per share
from $26.00 per share.
The Bottom Line
For the five years ended December 31, 2012, Alleghany's common
stockholders' equity per share increased at a compound annual
rate of 6.1%, compared with a compound annual rate of return of
1.6% for the S&P 500 over the same time period.
The management believes that with their excellent portfolio of
investments and businesses, they can produce 7-10% growth in book
value per share per year over the long term, and can double
shareholder value at least every ten years.
With an excellent portfolio and exceptional management
philosophy, Alleghany looks like a min-version of Berkshire
Alleghany is a Zacks Rank#1 (Strong Buy) stock. It also has a
Zacks recommendation of "Outperform". Further, the Zacks
Industry rank of 7 (out of 265) also indicates strong potential
for outperformance in the short- to mid-term. I believe that this
stock will be an excellent long-term addition to any portfolio.
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ALLEGHANY CORP (Y): Free Stock Analysis
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