W.R. Berkley Upgraded to Strong Buy - Analyst Blog

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On Jul 3, Zacks Investment Research upgraded W.R. Berkley Corporation ( WRB ) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

W.R. Berkley delivered positive earnings surprises in 3 out of the last 4 quarters with an average beat of 15.3%. The long-term earnings growth of the company is presently pegged at 9.5%.

We expect the property and casualty insurer to surpass expectations when it reports its second-quarter results on Jul 22. Our proven model shows that the property and casualty insurer is likely to beat earnings because it has a right combination of a positive Earnings ESP (Read: Zacks Earnings ESP: A Better Method) and Zacks Rank #1. ESP or Expected Surprise Prediction, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is at +1.47%.

Additionally, for the second quarter, the Zacks Consensus Estimate is pegged at 68 cents, up 4.4% year over year. The Zacks Consensus Estimate for 2013 increased 0.3% to $2.89 per share over the last 60 days, reflecting a year-over-year increase of 10.6%. The same for 2014 is pegged at $3.18, translating to a 10.3% year-over-year improvement.

W.R. Berkley is witnessing stable retention even with a general rate hike for the past many quarters. It is also successful in maintaining the trend of premium growth. The company's investments in a number of start-ups over the last four years have enabled it to capitalize on the improved market scenario. Its International business is another area, which will fuel long-term earnings growth.

Moreover, W.R. Berkley's strong operational performances support its commitment to return value to its shareholders. In May, the board approved an 11% dividend hike, representing a new annualized rate of 40 cents per share and a yield of 0.96%.

Other Stocks to Consider

Apart from W.R. Berkley, Alleghany Corporation ( Y ), HCI Group, Inc. ( HCI ), and Hilltop Holdings Inc . ( HTH ) are also worth considering. All these carry a Zacks Rank #1 (Strong Buy).

HCI GROUP INC (HCI): Free Stock Analysis Report

HILLTOP HLDGS (HTH): Free Stock Analysis Report

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

ALLEGHANY CORP (Y): Free Stock Analysis Report

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Zacks Investment Research

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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