On Sep 8, shares of White Mountains Insurance Group, Ltd.WTM scaled a new 52-week high of $755.10 on the latest repurchase authorization and divestiture agreement. Shares finally closed at $749.45 gaining about 0.7% in the last trading session.
White Mountain's one-year return of 18.35% was significantly higher than the S&P 500's return of -1.90%. The return was also much above that of the other industry players like The Travelers Companies, Inc. TRV , W.R. Berkley Corporation WRB and Loews Corporation L , which recorded returns of 5.76%, 12.68% and -15.74%, respectively.
On Aug 28, 2015, the board of directors of White Mountains authorized it to buy back up to 0.5 million shares. This is in addition to the 0.2 million shares left under the previous authorization.
This new approval came after a hiatus of three years. Increased share repurchases should lower the share count and hence, boost earnings per share going ahead. Moreover, with this initiative the company enhanced investors' worth, which in turn, boosted investor confidence on the stock and led to share price appreciation.
To ramp its balance sheet, in Jul 2015, the company entered into a definitive agreement to divest its subsidiary, Sirius International Insurance Group, Ltd. to the Singaporean investment unit of China Minsheng Investment Corp., Ltd. This deal on closing (projected within Jan 2016) is expected to bolster the adjusted book value of White Mountain by $65 per share and pump its excess capital to $2 billion.
Additionally, White Mountains' second-quarter 2015 earnings surpassed the Zacks Consensus Estimate. This property and casualty insurer delivered positive earnings surprises in three of the last four quarters with an average beat of 27.98%.
White Mountains currently carries a Zacks Rank #3 (Hold).
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