We expect property and casualty insurer
) to beat expectations when it reports its second-quarter 2014
results on Jul 23.
Why a Likely Positive Surprise?
Our proven model shows that ACE Limited is likely to beat earnings
because it has the right combination of two key ingredients.
, which represents the difference between the Most Accurate
estimate and the Zacks Consensus Estimate, is +0.89%. This is a
very meaningful and leading indicator of a likely positive earnings
: ACE Limited has a Zacks Rank #3 (Hold). Note that stocks with a
Zacks Rank #1, 2 and 3 have significantly higher chances of beating
earnings. The combination of ACE Limited's Zacks Rank #3 and +0.89%
ESP makes us very confident of an earnings beat this release. The
Sell-rated stocks with Zacks Rank #4 or 5 should never be
considered going into an earnings announcement.
What is Driving the Better-than-Expected Earnings?
A benign cat environment favoring underwriting results along with
an impressive inorganic growth story is expected to drive ACE
Limited's results in the second quarter. A favorable rate
environment that improved pricing would also lead to an upside.
Continued share buyback will boost the bottom line.
The positive trend is backed by the trailing four-quarter average
surprise of 14.50%, much of which was contributed by the impressive
19.50% surprise achieved in fourth quarter of 2014. Better
underwriting results continue to aid the company's performance.
Other Stocks to Consider
Here are some other companies you may want to consider as our model
shows they have the right combination of elements to post an
earnings beat this coming quarter:
Berkshire Hathaway Inc
), Earnings ESP of +6.62% and a Zacks Rank #1 (Strong Buy).
Montpelier Re Holdings Ltd.
), Earnings ESP of +11.34% and a Zacks Rank #2 (Buy).
Arch Capital Group Ltd
), Earnings ESP of +5.10% and a Zacks Rank #2 .
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ACE LIMITED (ACE): Free Stock Analysis Report
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ARCH CAP GP LTD (ACGL): Free Stock Analysis
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