On Mar 21, 2013, Zacks Investment Research upgraded
Montpelier Re Holdings Ltd.
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Montpelier has been experiencing rising earnings estimates on
the back of improved fourth-quarter 2012 results. Moreover, the
company swung to profit in 2012, paving the way for a brighter
outlook for 2013. Additionally, this property-casualty insurer
delivered positive earnings surprises in all of the last 4
quarters with an average beat of 44.7%.
On Feb 7, Montpelier reported fourth-quarter 2012 loss of 31
cents per share, which stood far less than the Zacks Consensus
Estimate loss of 80 cents. The results were supported by 2.9%
growth in gross premiums written and 5.6% improvement in net
insurance and reinsurance premiums earned.
Meanwhile, operating earnings came in at $2.58 per share in
2012, exceeding the Zacks Consensus Estimate of $2.12. Results
rebounded from a loss of $2.50 incurred in 2011.
A steady improvement in operating performance is also
reflected by Montpelier's escalated book value per share.
Moreover, the company has been retaining shareholders' confidence
by returning wealth via share repurchases worth $121 million in
2012 along with a 9.5% hike in common dividends. These factors
also bode well with the ratings agencies and augur long-term
Based on Montpelier's fundamental strength and focus on its
underwriting operations, the Zacks Consensus Estimate for 2013
rose 3.8% to $2.47 per share in the last 60 days, with one upward
revision in estimates. The estimate for 2014 is pegged at $2.55,
rising 1.6% in the last 60 days, with no estimate revisions.
Other Stocks to Consider
Apart from Montpelier, other stocks that are outperforming in
the insurance sector include
CNO Financial Group Inc.
XL Group Plc
). All these stocks carry a Zacks Rank #1 (Strong Buy).
CNO FINL GRP (CNO): Free Stock Analysis
MONTPELIER RE (MRH): Free Stock Analysis
PROGRESSIVE COR (PGR): Free Stock Analysis
XL GROUP PLC (XL): Free Stock Analysis Report
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