On March 21, Zacks Investment Research upgraded
EMC Insurance Group Inc
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
EMC Insurance has been witnessing rising earnings estimates on
the back of strong fourth-quarter 2013 results and an enhanced
guidance for 2014. Moreover, this property and casualty insurer
delivered positive earnings surprises in 3 of the last 4 quarters
with an average beat of 126.8%. The long-term expected earnings
growth rate for this stock is 5%.
EMC Insurance reported fourth-quarter operating net earnings of
95 cents a share, exceeding the Zacks Consensus Estimate by 9.2%.
The better-than-expected performance came on the back of improved
results at the company's Reinsurance and Property and Casualty
Revenues of EMC Insurance improved 14.3% year over year on
the strength of higher premiums earned across both the
Reinsurance (up 38.7% year over year) and Property and Casualty
Insurance (up 9.5%) segments. The top line also surpassed the
Zacks Consensus Estimate.
Based on projected combined ratio of 96.8% and projected
investment income consistent with the 2013 reported number, EMC
Insurance expects 2014 operating net earnings to range between
$3.00 and $3.25 per share, up from 2013 levels. Growth across the
Reinsurance and Property and Casualty Insurance segments is
expected to drive results going ahead.
Subsequently, the Zacks Consensus Estimate for 2014 earnings
increased 22.4% to $3.00 per share over the last 30 days and is
at the lower end of the company's guidance. For 2015 as well, the
Zacks Consensus Estimate moved north by 27% to $3.30 per share
over the same time frame.
Other Stocks to Consider
Investors interested in the property and casualty industry may
consider stocks like
AmTrust Financial Services, Inc
Atlas Financial Holdings, Inc
). All these stocks hold the same Zacks Rank as EMC
ATLAS FINL HLDG (AFH): Free Stock Analysis
AMTRUST FIN SVC (AFSI): Free Stock Analysis
EMC INSURANCE (EMCI): Free Stock Analysis
ALLEGHANY CORP (Y): Free Stock Analysis
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