EMC Insurance Hits 52-Week High - Analyst Blog


On Mar 26, EMC Insurance Group Inc. ( EMCI ) 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.

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 segments.

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 results.

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.

Zacks Rank

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 Alleghany Corporation ( Y ), AmTrust Financial Services, Inc. ( AFSI ) and ACE Limited ( ACE ). All these stocks carry the same Zacks Rank as EMC Insurance.

ACE LIMITED (ACE): Free Stock Analysis Report

AMTRUST FIN SVC (AFSI): Free Stock Analysis Report

EMC INSURANCE (EMCI): Free Stock Analysis Report

ALLEGHANY CORP (Y): Free Stock Analysis Report

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: ACE , AFSI , EMCI , Y



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