The Travelers Companies, Inc.
) to beat expectations when it reports first-quarter 2013 results
on Apr 23.
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
: Expected Surprise Prediction or ESP (Read:
Zacks Earnings ESP: A Better Method
), which represents the difference between the Most Accurate
Estimate and the Zacks Consensus Estimate, is +1.52%. This is
very meaningful and a leading indicator of a likely positive
earnings surprise for shares.
Zacks Rank #2 (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 Travelers' Zacks Rank # 2 (Buy) and +1.52% ESP
makes us expect a positive earnings beat on Apr 23.
What is Driving the Better Than Expected
Travelers' prudent underwriting practices, high retention rate,
pricing gains and positive renewal rate changes are expected to
lead to a positive earnings surprise in the upcoming quarter.
Travelers boasts a superior dividend yield and has a strong
The positive trend was seen in the trailing four-quarter's
average surprise of 140.74%, greatly aided by a whopping 500%
surprise in the last-reported quarter. Prudent underwriting
practices and favorable prior-year reserve development managed to
arrest the higher catastrophe losses arising due to Hurricane
Sandy. Higher premiums earned and net investment income aided the
Other Stocks to Consider
Travelers is not the only firm looking up this earnings season.
We also see likely earnings beats coming from these 3 industry
ASPEN INS HLDGS (AHL): Free Stock Analysis
AXIS CAP HLDGS (AXS): Free Stock Analysis
TRAVELERS COS (TRV): Free Stock Analysis
BERKLEY (WR) CP (WRB): Free Stock Analysis
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Aspen Insurance Holdings Ltd.
), Earnings ESP of +13.54% and a Zacks Rank #1 (Strong
AXIS Capital Holdings Limited
), Earnings ESP of +4.31% and a Zacks Rank # 2 (Buy)
W.R. Berkley Corporation
), Earnings ESP of +2.70% and a Zacks Rank #1 (Strong Buy)