On Mar 26,
EMC Insurance Group Inc.
) touched a 52-week high of $36.49. The share price has been
rising ever since the company reported strong financial results
in the fourth quarter of 2013 on Feb 20.
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EMC Insurance has delivered positive earnings surprises in three
of the last four quarters with a substantial average beat of
126.8%. In the last reported quarter, EMC Insurance posted
impressive results with both the top and bottom lines exceeding
the Zacks Consensus Estimate.
EMC Insurance's fourth-quarter operating net earnings came in at
95 cents a share, sliding 4% year over year. However, the number
beat the Zacks Consensus Estimate by 9.2%. The
better-than-expected performance can be attributed to improved
results at Reinsurance and Property and Casualty Insurance
Total operating revenues of this property and casualty insurer
during the fourth quarter surpassed the Zacks Consensus Estimate
and also escalated 14.3% year over year on account of higher
premiums earned across both the Reinsurance and Property and
Casualty Insurance segments.
Based on a projected combined ratio of 96.8% and projected
investment income consistent with 2013 numbers, EMC Insurance
expects 2014 operating net earnings to range between $3.00 and
$3.25 per share, up from 2013 levels. Growth across Reinsurance
and Property and Casualty Insurance segments is expected to drive
Moreover, EMC Insurance intends to focus on exploring new growth
opportunities outside its core Midwest market, which should help
to diversify the book of business geographically for the company.
We expect this endeavor to enhance its operational performance
besides helping it to achieve long-term objectives and enhance
shareholder value. Also, the targeted growth at its Reinsurance
and Property and Casualty Insurance segments should mitigate
risks in the investment portfolio. Gradual policy rate hikes,
higher retained policies, addition of new business along with a
healthy capital position augur well for the long-term growth of
EMC Insurance presently carries a Zacks Rank #1 (Strong Buy).
Some other-top ranked stocks in the property and casualty
insurance industry worth mentioning are
AmTrust Financial Services, Inc.
). All these stocks carry the same Zacks Rank as EMC Insurance.