On Jun 25, Zacks Investment Research downgraded
Horace Mann Educators Corp.
) by two notches to a Zacks Rank #3 (Hold) from a Zacks Rank #1
Why the Downgrade?
Horace Mann has been witnessing sluggish earnings estimate
revisions due to absence of new business in property segment and
lack of any near-term growth catalyst. Additionally, this multiline
insurer underperformed the year-to-date S&P 500 index, which
generated a return of 6.30%, against negative return of 2.9%
clocked by the company.
On Apr 24, Horace Mannreported first-quarter 2014 operating
earnings per share (EPS) of 65 cents, which exceeded the Zacks
Consensus Estimate by 38.3% and the year-ago quarter figure by
Sluggish premiums' growth, significantly reduced gains from net
realized investments and lower policies-in-force led to top-line
growth of mere 2.6% from the prior-year quarter. Furthermore,
higher catastrophe losses and policy acquisitions expenses
partially offset growth in the property-casualty segment. Moreover,
life insurance segment remained weak, overall dragging the book
value per share.
Nevertheless, Horace Mann's investment portfolio and annuities
improved driven by strong performance in the fixed maturity and
alternative investment portfolios as well as improved interest
Moreover, the Zacks Consensus Estimate for both 2014 and 2015
moved north by a penny per share to $2.37 and $2.61 in the last 7
days. The EPS in 2014 is also expected to decline about 22.4% from
2013. Meanwhile, no upward estimate revision was witnessed for both
Moreover, the Most Accurate estimate for Horace Mann's 2015
earnings currently stand at $2.59 a share, resulting in an
of -0.8%, and reflecting a slow growth momentum.
Other Worthy Insurers
While we prefer to be on sidelines with regard to Horace Mannfor
the time being, some better-ranked insurers such as
Old Republic International Corp.
AmTrust Financial Services Inc.
Radian Group Inc.
) are worth considering. All these stocks sport a Zacks Rank #1
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