Global Indemnity Touches 52-Week High on Strong Q1 Earnings - Analyst Blog

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Global Indemnity plc ( GBLI ) scaled a new 52-week high of $27.78 on Jun 9, 2014 and this was sustained till Jun 10, 2014. The company's shares have been riding high, mainly driven by its strong first-quarter 2014 earnings.

Global Indemnity's first-quarter earnings of 39 cents per share surpassed the Zacks Consensus Estimate and increased 14.7% year over year. Notably, this property and casualty insurer had previously delivered positive earnings surprises in all of the last four quarters with an impressive average beat of  46.74%.

Following Global Indemnity's earnings release on May 5, 2014, its shares gained 4.4% to close at $27.48 in the last trading session. The year-to-date return from the stock was 8.61%, much above Nasdaq's return of 3.85% and that of other players in the industry like XL Group plc ( XL ) and W.R. Berkley Corporation ( WRB ) with returns of 4.15% and 4.25% respectively over the same period.

Global Indemnity has been witnessing premium growth in both its Insurance and Reinsurance operations. The first quarter also saw an increase in premiums in these two segments. This led to a decrease in the expense ratio, reflecting increased profitability for the company. Additionally, underwriting and pricing improvement led to a better loss ratio.

At the end of the first quarter, the company's financial position also remained robust with an increase in assets and shareholders' equity as compared with year-end 2013. We believe that the strong financial position of the company should enable it to execute initiatives like acquisitions and mergers, which would help in generating inorganic growth.

Global Indemnity currently carries a Zacks Rank #4 (Sell). However, better-ranked players in the same industry include W.R. Berkley and The Travelers Companies, Inc. ( TRV ). Both these stocks sport a Zacks Rank #1 (Strong Buy).


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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 , Earnings , Stocks

Referenced Stocks: XL , TRV , WR , WRB , GBLI

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