Back to Main

W.R. Berkley: A Strong Buy - Analyst Blog

By: Zacks.com
Posted: 4/11/2013 6:09:00 PM
Referenced Stocks: ACGL;AXS;NAVG;WR;WRB

On Apr 10, Zacks Investment Research upgraded W.R. Berkley Corporation ( WRB ) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

W.R. Berkley Corp has been witnessing rising earnings estimates since it reported solid fourth-quarter results.

Over the last 30 days, 4 of 9 estimates moved north, pushing the Zacks Consensus Estimate for 2013 by 0.7%.

With respect to earnings trends, W.R. Berkley Corp delivered positive earnings surprises in all 4 quarters of 2012, with an average beat of 13.69%. The property and casualty insurer is likely to beat earnings in the first quarter of 2013 because it has the right combination of a positive Earnings ESP (Read: Zacks Earnings ESP: A Better Method ) and Zacks Rank. The company's ESP (Expected Surprise Prediction) currently is +2.74%.

The year-to-date return for the stock came in at 19.48%, higher than that of S&P 500's return of 11.33%.

The company has formed a division to write inland marine and related property insurance and hired an industry veteran to head the new operations in Mar 2013. The new unit is named Berkley Fire & Marine Underwriters and is headquartered in Chicago. It will act as an underwriting entity for all of W.R. Berkley subsidiaries which carry a rating of A+ assigned by the credit rating agency, A.M. Best Inc. This venture of W.R. Berkley is an effort to strengthen its position and take advantage of the eventual positive market turn.

W.R. Berkley Corp. is scheduled to release its first quarter 2013 earnings results on Apr 23 after the closing bell. The Zacks Consensus Estimate for the first quarter is pegged at 73 cents representing a year-over-year improvement of 0.46%.

We expect the absence of any major catastrophe event in the first quarter to bolster the company's performance.

Other Stocks to Consider

Other property and casualty insurers like Arch Capital Group Ltd. ( ACGL ), Navigators Group Inc. ( NAVG ) and AXIS Capital Holdings Limited ( AXS ), carry a Zacks Rank #1 (Strong Buy) and are worth noting.



ARCH CAP GP LTD (ACGL): Free Stock Analysis Report

AXIS CAP HLDGS (AXS): Free Stock Analysis Report

NAVIGATORS GRP (NAVG): Free Stock Analysis Report

BERKLEY (WR) CP (WRB): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research