On Feb 26, Zacks Investment Research upgraded
Employer Holdings Inc.
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Employer Holdings has remained steady based on its strong
fundamentals, which involves a disciplined underwriting approach
and prudent reserving practices. Based on higher expenses and
market weakness that continues to hurt payrolls, the bottom line
portrays a downward trend. However, given a modest economic
recovery, the company is expected to rebound.
Nonethless, this specialty provider of workers' compensation
insurance has been generating significant growth in premiums.
Strong operating cash flow, higher realized gains on investments,
book value per share growth and strong financial strength ratings
further validate Employer Holdings commitment to accentuate
growth in the long run.
Employer Holdings has delivered positive earnings surprises in
3 of the last 4 quarters with an average beat of 134.1%. The
long-term expected earnings growth rate for this stock is
On Nov 7, Employer Holdings reported its third-quarter 2012
operating earnings of 15 cents per share, remarkably beating the
Zacks Consensus Estimate of 6 cents a share. However, it lagged
the year-ago quarter's earnings by a nickel.
While total revenue surged 33.8% year over year to $151.1
million, total expenses also spiked 36.7% to $144.2 million. This
negated most of the top-line growth.
Ahead of its fourth quarter earnings results, scheduled to
release after the closing bell on Feb 27, the Zacks Consensus
Estimate for 2012 remained flat at 20 cents per share as none of
estimates were revised over the last 30 days. Following a similar
revision trend, the Zacks Consensus Estimate remained at 59 cents
per share for 2013.
Other Stocks to Consider
Other strong performers in the insurance sector include
EMC Insurance Group Inc.
XL Group Plc
Navigators Group Inc.
), all of which carry a Zacks Rank #1 (Strong Buy).
EMPLOYERS HLDGS (EIG): Free Stock Analysis
EMC INSURANCE (EMCI): Free Stock Analysis
NAVIGATORS GRP (NAVG): Free Stock Analysis
XL GROUP PLC (XL): Free Stock Analysis Report
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