Global Indemnity: A Strong Buy - Analyst Blog


On Feb 26, Zacks Investment Research upgraded Global Indemnity Plc ( GBLI ) to a Zacks Rank #1 (Strong Buy) from a Zacks Rank #3 (Hold).

Why the Upgrade?

Global Indemnity has been experiencing rising earnings estimates on the back of improved fourth-quarter 2013 results. Additionally, this property-casualty insurer delivered positive earnings surprises in all of the last 4 quarters with an average beat of 45.5%.

On Feb 20, Global Indemnity reported fourth-quarter 2013 operating earnings per share of 76 cents, which significantly topped the Zacks Consensus Estimate of 31 cents. Results also outpaced the year-ago quarter earnings of 18 cents a share.

Top-line growth of 41.3% over the prior-quarter more than offset the hike in underwriting and operating expenses. Additionally, a plunge in loss and loss adjusted expenses and interest costs helped improve combined ratio to 85.5% from 106.7% in the year-ago quarter.

An escalation in a new business, agent relationships and price hikes are driving the core insurance and reinsurance operations, although low interest rate environment undermines the investment portfolio.

A healthy cash and capital position further strengthens the company's outlook, as reflected by growth in book value per share. Overall, a diversified business mix, prudent risk management and benign catastrophe losses score well with the investors, reflecting strong long-term growth potential.

Based on Global Indemnity's fundamental strength and capital management, the Zacks Consensus Estimate for 2014 jumped 4.2% to $1.25 per share in the last 7 days. Nonetheless, the estimate for 2014 remained static at $1.40 over the same period. Meanwhile, no downward revision in estimates was witnessed for both the years.

Other Stocks to Consider

Apart from Global Indemnity, American Financial Group Inc. ( AFG ), EMC Insurance Group Inc. ( EMCI ) and Navigators Group Inc. ( NAVG ) sport a comparable Zacks Rank #1.

AMER FINL GROUP (AFG): Free Stock Analysis Report

EMC INSURANCE (EMCI): Free Stock Analysis Report


NAVIGATORS GRP (NAVG): Free Stock Analysis Report

To read this article on click here.

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: AFG , EMCI , GBLI , NAVG

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