On Jul 2, 2013, Zacks Investment Research upgraded
Endurance Specialty Holdings Ltd.
) to a Zacks Rank #1 (Strong Buy) from a Zacks Rank #3
Why the Upgrade?
Endurance has been witnessing rising estimates on the back of
improved first quarter 2013 results. Moreover, the company's
strong underwriting capabilities as well as improved expense
ratios have been impressive. Additionally, this global specialty
property-casualty insurer and reinsurer delivered positive
earnings surprises in all of the last 4 quarters with an average
beat of 44.4%.
On May 1, Endurance reported first-quarter 2013 operating
earnings per share of $2.08, remarkably beating the Zacks
Consensus Estimate of $1.19 and the year-ago quarter figure of
Results were supported by a 7.8% increase in net premiums
written and a 355% rise in underwriting income to $63.7 million.
Meanwhile, lower loss expenses also improved the expense ratios
and combined ratio, thereby generating 2.3% higher book value per
share and annualized operating return on equity (ROE) of 15.6%
against 9.6% in the year-ago period.
Lower operating cash flow and net investment income were the
dampeners. Overall, Endurance is well positioned to capitalize on
the changing market dynamics. The company's recent strategic
restructuring within the global specialty team coupled with the
global expansion, rate increases in major markets and healthy
January business renewals are boosting both the insurance and
Effective and consistent capital deployment via dividend
payouts and share buybacks further instil confidence among
investors. These factors also explain the surge in the Zacks
Based on Endurance's fundamental strength and underwriting
profitability, the Zacks Consensus Estimate for 2013 rose 2.0% to
$5.22 per share in the last 60 days. The estimate for 2014 is
pegged at $4.80, up 1.1% in the last 60 days. Meanwhile, no
downward revision in estimates was witnessed for both the
Other Insurers Worth a Look
Apart from Endurance, other stocks that are outperforming in
the insurance sector include
Hilltop Holdings Inc.
HCI Group Inc.
American Safety Insurance Holdings Ltd.
). All these stocks carry a Zacks Rank #1 (Strong Buy).
AMER SAFETY INS (ASI): Free Stock Analysis
ENDURANCE SPLTY (ENH): Free Stock Analysis
HCI GROUP INC (HCI): Free Stock Analysis
HILLTOP HLDGS (HTH): Free Stock Analysis
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