Montpelier Re Holdings Ltd
) to beat expectations when it reports first-quarter 2013 results
on Apr 24.
Why a Likely Positive Surprise?
Our proven model shows that the property & casualty insurer
is likely to beat earnings because it has the two key
Positive Zacks ESP
: ESP (Read:
Zacks Earnings ESP: A Better Method
), which represents the difference between the Most Accurate
Estimate and the Zacks Consensus Estimate, is +5.50%. This is
very meaningful and a leading indicator of a likely positive
earnings surprise for shares.
Zacks Rank #1 (Strong Buy)
: Note that stocks with a Zacks Rank of #1, #2 and #3 have a
significantly higher chance of beating earnings. The sell rated
stocks (#4 and #5) should never be considered going into an
The combination of Montpelier's Zacks Rank # 1 (Strong Buy) and
+5.50% ESP makes us expect a positive earnings beat on Apr 23.
What is Driving the Better Than Expected
Montpelier's increased exposure in the property catastrophe lines
of business, efforts to focus on underwriting operations, augment
capital flexibility and strengthen competitive position are
expected to lead to a positive earnings surprise in the upcoming
During its fourth-quarter 2012 earnings conference call,
Montpelier stated that it had already spent $8 million in share
repurchases for first quarter 2013. This will likely aid the
The positive trend was seen in the trailing four-quarter's
average surprise of 44.7%, significantly boosted by surprises in
the first and last quarter of 2012. Fourth quarter 2012
experienced higher premium as well as narrow underwriting loss
compared with the prior-year quarter.
Other Stocks to Consider
Montpelier is not the only firm looking up this earnings season.
We also see likely earnings beats coming from these 3 industry
Aspen Insurance Holdings Ltd
), Earnings ESP of +13.54% and a Zacks Rank #1 (Strong Buy).
), Earnings ESP of +6.78% and a Zacks Rank # 1 (Strong Buy).
W.R. Berkley Corporation
), Earnings ESP of +2.70% and a Zacks Rank #1 (Strong Buy).
ASPEN INS HLDGS (AHL): Free Stock Analysis
MONTPELIER RE (MRH): Free Stock Analysis
PARTNERRE LTD (PRE): Free Stock Analysis
BERKLEY (WR) CP (WRB): Free Stock Analysis
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