Hallmark Financial Services Inc.
) has posted positive earnings surprises in 5 of the last 6
quarters with an average beat of 76.1%. Most recently, this
property and casualty insurer delivered an earnings surprise of
more than 150% for its third quarter. Additionally, with a
price-to-book (P/B) ratio of just 0.81, this Zacks Rank # 1 (Strong
Buy) stock appears to be a true value pick.
On Nov 7, Hallmark Financial reported third-quarter earnings of 18
cents per share, which surpassed the Zacks Consensus Estimate by a
substantial 157% and also improved significantly from a penny
earned last year. The upside was largely driven by an improved
top-line along with lower loss and loss adjustment expenses,
primarily attributable to better current accident year loss trends
in the Personal Lines business.
Operating revenue was $84 million, which outpaced the Zacks
Consensus Estimate by 7% and the year-ago number by 6.3%. The
improvement stemmed from higher premiums, largely from the E&S
Commercial business unit and from the acquisition of the Workers
Hallmark Financial expects to have mid single-digit to low
double-digit rate increases across all operations. However, General
Aviation might face stiff competition in a contracting market.
Additionally, management stated that the initiative to improve
underwriting profitability, increase rates and exit unprofitable
zones and product lines in the Personal Segment has been executed
Hallmark Financial has not yet announced its fourth-quarter
earnings release date. The Zacks Consensus Estimate for the quarter
is 11 cents on revenues of $87 million. The expected earnings
represent a year-over-year improvement of 450%.
For 2013, the Zacks Consensus Estimate increased 5.1% to 82 cents
over the last 60 days, which would mark a year-over-year
improvement as high as 266.7%.
Along with a very attractive P/B multiple, Hallmark Financial has a
price-to-earnings (P/E) ratio of 11.1 (a P/B ratio under 3.0 and a
P/E ratio below 15.0 generally indicate value).
Headquartered in Fort Worth, Texas and founded in 1987, Hallmark
Financial Group, through its subsidiaries, provides property and
casualty insurance products to businesses and individuals in the
United States. The company has a market cap of $176.8 million.
Other Zacks Rank #1 stocks from the same industry include
Cincinnati Financial Corp. (
), Fidelity National Financial, Inc. (
) and First American Financial Corporation (
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