We expect property and casualty insurer
The Chubb Corp.
) to beat expectations when it reports fourth-quarter and full
year 2013 results on Jan 30.
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Why a Likely Positive Surprise?
Our proven model shows that Chubb is likely to beat earnings
because it has the right combination of two key ingredients.
Positive Zacks ESP:
Expected Surprise Prediction or Earnings ESP, which represents
the difference between the Most Accurate estimate and the Zacks
Consensus Estimate, is +0.49%. This is a leading indicator of a
likely positive earnings surprise for shares.
Zacks Rank #1 (Strong Buy):
Note that stocks with a Zacks Ranks #1, 2 and 3 have a
significantly higher chance of beating earnings. The Sell-rated
stocks (#4 and 5) should never be considered going into an
The combination of Chubb's Zacks Rank #1 (Strong Buy) and +0.49%
ESP makes us confident of a positive earnings beat on Jan 30.
What is Driving the Better-Than-Expected
Price strengthening in the Commercial lines as well as Personal
lines business will drive overall earnings growth at Chubb.
Earnings will also benefit from a benign catastrophe loss
experienced by the company this year. The company's International
segment which has been witnessing premium increases for the past
several quarters is also expected to contribute to earnings
The bottom-line at Chubb will benefit from the company's
disciplined share repurchase activity. The positive trend is seen
in the trailing four-quarter average surprise of 49.5%.
Other Stocks to Consider
Here are some other companies you may want to consider as our
model shows that these have the right combination of elements to
post an earnings beat this quarter:
Aspen Insurance Holdings Ltd.
), earnings ESP of 3.57% and a Zacks Rank #1 (Strong Buy).
), earnings ESP of 2.9% and a Zacks Rank #3 (Hold).
Platinum Underwriters Holdings Ltd.
), earnings ESP of 10.66% and a Zacks Rank #1 (Strong Buy).