Why the Upgrade?
Navigators Group has experienced upward earnings estimate revisions on the back of improved outlook for fourth-quarter 2014, following its robust earnings results in the first nine months of 2014. Moreover, its strong capitalization and a healthy underwriting profile are deemed impressive.
Additionally, this leading specialty insurer has kept the earnings streak alive in the trailing four quarters, with an average beat of 36.9%. The third-quarter 2014 earnings of $1.79 per share also topped the Zacks Consensus Estimate by 65.7% and the year-ago quarter figure by 11.9%, reflecting strong trends going ahead.
Upward estimate revisions witnessed by Navigators Group reflect optimism. The Zacks Consensus Estimate for 2014 and 2015 grew 11.4% and 1.9% to $5.58 and $5.42 per share, respectively, in the last 60 days. Notably, earnings are expected to surge about 30% on a year-over-year basis in 2014, while no downward estimate revisions were witnessed for both the years.
Despite competitive pressure, persistently low interest rates and higher expenses, Navigators Group has been able to achieve strong bottom line and underwriting results by aggressively focusing on solid premium growth, prudent underwriting risk management and a strong investment portfolio that steers clear of major market risks.
These factors have prompted robust growth in the book value and operating cash flow that rose 39.5% year over year to $181.4 million in the first nine months of 2014. The underlying growth drivers have scored well with investors and ratings agencies, thereby raising outlook for coming quarters as well.
Other Stocks to Consider
Investors interested in the insurance industry may also consider other favorably-ranked stocks like The Allstate Corp. ( ALL ), Hallmark Financial Services Inc. ( HALL ) and Platinum Underwriters Holdings Ltd. ( PTP ), each sporting the same Zacks Rank as Navigators Group.