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HCC Insurance Upped to Buy - Analyst Blog

Posted: 11/12/2013 6:05:00 PM
Referenced Stocks: AHL;AWH;CINF;HCC

On Nov 9, Zacks Investment Research upgraded HCC Insurance Holdings Inc . ( HCC ) to a Zacks Rank #2 (Buy).

Why the Upgrade?

HCC Insurance has been witnessing rising earnings estimates on the back of strong third-quarter 2013 results and an enhanced guidance for 2013. Moreover, this property and casualty insurer delivered positive earnings surprises in the last 4 quarters with an average beat of 29.5%. The long-term expected earnings growth rate for this stock is 8.5%.    

HCC Insurance reported third-quarter results on Oct 29. Non-GAAP earnings per share came in at 93 cents, surpassing the Zacks Consensus Estimate of 79 cents by nearly 18%.

The outperformance was largely aided by an improved top line, which grew 0.8% year over year. Revenues also surpassed the Zacks Consensus Estimate by 1%.

Gross premiums written for the quarter increased 2% to $678.9 million.

Based on its progress, the company raised its earnings per share projection for 2013 to $3.70-$3.80 from $3.20-$3.50.

The Zacks Consensus Estimate for 2013 increased 3.4% to $3.63 per share as all the estimates were revised higher over the last 30 days. The current estimate lies below the guidance range provided by HCC Insurance. For 2014, 2 of the 5 estimates were revised higher over the same time frame, lifting the Zacks Consensus Estimate by 0.8% to $3.62 per share.

Other Stocks to Consider

Property and casualty insurers Allied World Assurance Co. ( AWH ), Aspen Insurance Holdings Ltd . ( AHL ), and Cincinnati Financial Corp . ( CINF ) with a favorable Zacks Rank #1 (Strong Buy) are also worth considering.

ASPEN INS HLDGS (AHL): Free Stock Analysis Report

ALLIED WORLD AS (AWH): Free Stock Analysis Report

CINCINNATI FINL (CINF): Free Stock Analysis Report

HCC INS HLDGS (HCC): Free Stock Analysis Report

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Zacks Investment Research