On Oct 9, Zacks Investment Research upgraded
Navigators Group Inc.
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Navigators Group has been experiencing rising earnings
estimates on the back of improved market trends following its
robust second-quarter 2013 results. Moreover, strong
capitalization and a healthy underwriting profile are deemed
Additionally, this leading property-casualty insurer delivered
positive earnings surprises in the last 4 quarters with an
average beat of 116.2%. On Aug 7, Navigators Group reported
second-quarter 2013 operating earnings per share of 82 cents,
which outpaced the Zacks Consensus Estimate of 76 cents but
lagged the year-ago quarter number of 88 cents.
While year-over-year growth of 4.3% in net written premiums
boosted the top line, higher-than-expected loss, loss adjusted
and operating expenses negated the bottom-line growth. However,
underwriting ratios improved, reflected by a combined ratio of
97.7% against 98.1% in the year-ago quarter. Moreover, lower net
investment income was more than offset by improved operating cash
flow and an appreciated asset position.
Navigators Group consistently focuses on boosting its
insurance and underwriting efficiencies through prudent,
conservative, yet comprehensive risk management. Meanwhile,
reduced debt levels reflect a healthy capital position and
financial leverage, which also scores well with the investors and
ratings agencies. We foresee steady growth in the future as
Based on Navigators Group's fundamental strength and capital
management, the Zacks Consensus Estimate for both 2013 and 2014
inched up 0.6% each to $3.10 per share and $3.44 a share,
respectively, in the last 60 days. Furthermore, no downward
revision in estimates was witnessed for both the years.
Other Stocks to Consider
Apart from Navigators Group, other outperforming insurers in
the industry include
). All these stocks carry a Zacks Rank #1 (Strong Buy).
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