XL Group plc
) is set to report fourth-quarter 2013 results on Feb 5. Last
quarter, the company posted a 1.85% negative surprise. Let's see
how things are shaping up for this announcement.
Growth Factors This Past Quarter
With strong international exposure and a diversified product
suite, we believe the company is well positioned to write higher
premiums to fuel top-line growth for the fourth quarter of 2014.
With a strong balance sheet and its ability to generate healthy
cash flow, we expect the company to indulge in more buybacks,
thereby lowering the share count and boosting the bottom line.
On the tepid side, XL Group has substantial exposure to losses
resulting from natural and man-made disasters and other
catastrophic events. Net investment income at XL Group has been
on a declining trend for the past few years, With performance
closely linked to credit markets, the exposure to these assets
can further cause volatility in investment earnings.
Our proven model does not conclusively show that XL Group is
likely to beat earnings this quarter. That is because a stock
needs to have both a positive
and a Zacks Rank of #1, 2 or 3 for this to happen. That is not
the case here as you will see below.
Positive Zacks ESP:
That is because the Most Accurate estimate stands at $0.87
while the Zacks Consensus Estimate is lower at $0.84. That leads
to a difference of +3.57%.
XL Group's Zacks Rank #4 (Sell) when combined with a positive ESP
makes surprise prediction difficult. We caution against stocks
with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the
earnings announcement, especially when the company is seeing
negative estimate revisions momentum.
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 quarter:
CNA Financial Corporation
), earnings ESP of +22.3% and a Zacks Rank #2 (Buy).
), earnings ESP of +13.59% and a Zacks Rank #2.
Aspen Insurance Holdings Ltd.
), earnings ESP of +3.57% and a Zacks Rank #3 (Hold).
ASPEN INS HLDGS (AHL): Free Stock Analysis
CNA FINL CORP (CNA): Free Stock Analysis
PROASSURANCE CP (PRA): Free Stock Analysis
XL GROUP PLC (XL): Free Stock Analysis Report
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