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HCI Group Announces $20 Million Share Repurchase Program

In a bid to return more value to its shareholders, the board of directors of HCI Group, Inc.HCI recently authorized a new share buyback program. The latest authorization will allow the company to repurchase common stock worth up to $20 million during 2017.

Notably, the property and casualty (P&C) insurer has repurchased 0.6 million shares worth $18 million, during the nine months ended Sep 30, 2016. Earlier in Dec 2016, the board of directors of the P&C insurer authorized the company to buy back up to $20 million of its common stock.

HCI Group's financial strength allows it to execute share repurchases successfully. As of Sep 30, 2016, the company had cash worth $291.9 million, up 9% from the 2015-end level. Thus, a strong liquidity position enables the company to engage in share buybacks and boost shareholder value.

Shares of HCI gained 52.4%, significantly outperforming the Zacks categorized Property and Casualty insurance industry's growth of about 14.6%, since its earnings release. Substantial improvement, both in the bottom line and top line, resulted in the outperformance. Robust premiums and investment income performance were particularly responsible for the upside.

Share repurchases benefit the company's earnings per share, book value as well as shareholder equity with reduction in the number of shares outstanding. Therefore, share buyback programs raise optimism among investors and boost their confidence in a stock. Also, the company's strong capital position is reflected through its regular share repurchases.

Stocks to Consider

Investors interested in other stocks from the same space can consider Alleghany Corporation Y , NMI Holdings, Inc. NMIH , Arch Capital Group Ltd. ACGL and Mercury General Corporation MCY . Each of these stocks sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Alleghany Corporation deals with P&C reinsurance and insurance businesses in the United States and internationally. The company delivered positive surprises in three of the last four quarters with an average beat of 20.52%.

NMI Holdings offers private mortgage guaranty insurance services in the United States. The company delivered positive surprises in all of the last four quarters with an average beat of 62.80%.

Arch Capital offers property, casualty, and mortgage insurance and reinsurance products worldwide. It delivered positive surprises in all of the last four quarters with an average beat of 9.27%.

Mercury General deals in writing personal automobile insurance in the United States. It delivered positive surprises in two of the last four quarters, but with an average miss of 21%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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