On Aug 13, 2013, Zacks Investment Research upgraded
EMC Insurance Group Inc.
) to a Zacks Rank #1 (Strong Buy) from a Zacks Rank #3
Why the Upgrade?
EMC Insurance Group has been experiencing rising earnings
estimates on the back of improved second-quarter 2013 results.
Moreover, lower catastrophe losses, stable reserves and a
consistent capital deployment via dividends have been impressive.
Additionally, this property-casualty insurer and reinsurer
delivered positive earnings surprises in 3 of the last 4 quarters
with an average beat of 100.4%.
On Aug 8, EMC Insurance Group reported second-quarter 2013
operating earnings per share of 47 cents, which significantly
outpaced the Zacks Consensus Estimate of 10 cents. Earnings also
rebounded from the year-ago quarter loss of 14 cents a share.
Results were supported by 13.8% year over year top-line,
primarily driven by 15.3% improvement in premiums earned.
Moreover, lower-than-expected expenses supported the improvement
in combined ratio to 102.2% from 113.9% in the year-ago period.
Book value per share also rose 5.7% year over year to $30.75.
While policy rate increases should continue to grow in
high-single digits in the second half of 2013, the low interest
rate environment is likely to weigh on the underwriting margins
and investment returns. Nonetheless, higher retained policies,
addition of new business along with a healthy capital position
bodes well for long-term growth.
Based on EMC Insurance Group's fundamental strength and
capital management, the Zacks Consensus Estimate for 2013 jumped
17% to $2.75 per share in the last 7 days. Moreover, the same for
2014 rose 9.1% to $3.00 in the last 7 days. Meanwhile, no
downward revision in estimates was witnessed for both the
Other Stocks to Consider
Apart from EMC Insurance Group, other outperforming insurers
in the industry include
HCI Group Inc.
Global Indemnity Plc
Everest Re Ltd.
). All the stocks carry a Zacks Rank #1 (Strong Buy).
EMC INSURANCE (EMCI): Free Stock Analysis
GLOBAL INDEMNTY (GBLI): Free Stock Analysis
HCI GROUP INC (HCI): Free Stock Analysis
EVEREST RE LTD (RE): Free Stock Analysis
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