On Aug 15, 2013, Zacks Investment Research upgraded
Eastern Insurance Holdings Inc.
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Eastern Insurance has been experiencing rising earnings
estimates on the back of improved second-quarter 2013 results.
Moreover, strong underwriting performance, agency relationships
and a healthy capital position have been impressive.
Additionally, this multi-line insurer delivered positive earnings
surprises in all of the last 4 quarters with an average beat of
On Aug 1, Eastern Insurance reported second-quarter 2013
operating earnings per share of 39 cents, which outpaced the
Zacks Consensus Estimate of 30 cents and year-ago quarter number
of 17 cents.
Total revenue grew 21.1% year over year, driven by a 17.6%
upsurge in premiums along with higher investment income and
realized gains. These were partially offset by 16% growth in
total expenses. Other growth metrics such as combined ratio and
book value per share witnessed improvement.
Eastern Insurance's strategic focus on organic growth and
initiatives to expand in the emerging markets are showing
results. Moreover, the company is gaining traction in both its
workman's compensation insurance as well as reinsurance and other
businesses, given the improvement in premium retention rates.
Alongside, prudent expense and risk management as well as strong
capitalization scores well with the ratings agencies, reflecting
a strong long-term growth potential.
Based on Eastern Insurance's fundamental strength and capital
management, the Zacks Consensus Estimate for 2013 rose 3.0% to
$1.38 per share in the last 30 days. Moreover, the estimate for
2014 jumped 9.7% to $1.70 for the same period. Meanwhile, no
downward revision in estimates was witnessed for both the
Moreover, the Most Accurate Estimate for Eastern Insurance's
2013 earnings stands at $1.50 a share, resulting in a positive
Earnings ESP (Read:
Zacks Earnings ESP: A Better Method
) of 8.7%.
Other Stocks to Consider
Apart from Eastern Insurance, other outperforming insurers in
the industry include
HCI Group Inc.
EMC Insurance Group Inc.
Everest Re Ltd.
). All the stocks carry a Zacks Rank #1 (Strong Buy).
EASTERN INSURNC (EIHI): Free Stock Analysis
EMC INSURANCE (EMCI): Free Stock Analysis
HCI GROUP INC (HCI): Free Stock Analysis
EVEREST RE LTD (RE): Free Stock Analysis
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