Navigators Group Stock Rallies 25% Year to Date: Here's Why
That The Navigators Group, Inc . NAVG stock is favored by investors is further corroborated by its share price movement. Shares of the company have rallied 25.6% year to date, outperforming its industry 's increase of 4.6%. With a market capitalization of $5.1 billion, average volume of shares traded in the past three months was 0.01 million.
What's Behind the Rally?
The company delivered a positive earnings surprise in the last two quarters with an average beat of 37.45%. The bottom line surged 50% year over year.
Continued double-digit premiums growth and a solid performing investment portfolio have aided the company to deliver solid results. While the company generated a 10.5% increase in net investment income, revenues grew 12.7% through the first half of 2018.
Underwriting profit soared 82% through the first half of 2018, leveraging strong results at International Insurance and GlobalRe. Combined ratio for the first half improved 190 basis points year over year.
The company has also strengthened its balance sheet. As of Jun 30, 2018, Navigators Group's total investment and cash increased nearly 2% from the level on Dec 31, 2017 while debt level remained flat. Book value per share as of Jun 30, 2018 was $41.49, up 1.3% sequentially.
Navigators Group pursues strategic acquisitions, which in turn, solidify its core business as well as help it expand globally. In June 2018, the company closed the buyout of a Belgium-domiciled insurance company as well as a related underwriting agency, respectively known as ASCO and BDM. The consolidation extends the company's presence in the European Union's single market. It remains focused on expanding its specialty business in the European Union and thus this transaction seems a strategic fit.
Navigators Group carries a Zacks Rank #2 (Buy).
Other Stocks to Consider
Investors interested in property and casualty industry can also check out other top-ranked stocks like Arch Capital Group Ltd. ACGL , American Financial Group, Inc. AFG and Berkshire Hathaway Inc. BRK.B , each sharing the same bullish Zacks Rank of 2 with Navigators Group. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .
Arch Capital provides property, casualty and mortgage insurance and reinsurance products worldwide. It delivered a 13.46% positive surprise in the earlier reported quarter.
American Financial provides property and casualty insurance products in the United States. Last reported quarter, it pulled off an 8.51% positive earnings surprise.
Berkshire Hathaway engages in insurance, freight rail transportation and utility businesses. It came up with a 22.91% beat in the previously reported quarter.
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