Montpelier Upped to Strong Buy - Analyst Blog
09 Avril 2013 - 1:17PM
Zacks
On Apr 6, 2013, Zacks Investment Research upgraded
Montpelier Re Holdings Ltd. (MRH) to a Zacks Rank
#1 (Strong Buy).
Why the Upgrade?
Montpelier remains well positioned to deliver solid numbers going
forward, given its increased exposure in the property catastrophe
lines of business. In addition, the company’s efforts to focus on
underwriting operations, augment capital flexibility and strengthen
competitive position bode well going forward.
Additionally, Montpelier’s launch of Blue Capital marks its efforts
to expand the underwriting partnership business. Blue Capital is an
asset management platform offering an array of catastrophe
reinsurance-linked investment products to institutional and retail
investors.
Montpelier also expects a 1% to 5% increase in net written
premiums, excluding the impact of reinstatements, for the first
quarter of 2013.
With respect to earnings trend, Montpelier delivered positive
earnings surprises in all of the last 4 quarters with an average
beat of 44.7%. The Zacks Consensus Estimate for the first quarter
of 2013 currently stands at 79 cents.
A steady improvement in operating performance is also reflected by
Montpelier’s escalated book value per share. Moreover, the company
has been retaining shareholders’ confidence by returning wealth via
share repurchases and dividend hikes. It has already bought back 8
million shares in January this year.
Based on Montpelier’s fundamental strength and focus on its
underwriting operations, the Zacks Consensus Estimate for 2013 rose
2.1% to $2.47 per share in the last 60 days, with one upward
revision in estimates. The estimate for 2014 is pegged at $2.60,
rising 3.6% in the last 60 days, with one upward revision in
estimate.
Other Stocks to Consider
Apart from Montpelier, other stocks that are outperforming in the
insurance sector include AXIS Capital Holdings
Ltd. (AXS), XL Group Plc (XL) and
Arch Capital Group Ltd. (ACGL). All these stocks
carry a Zacks Rank #1 (Strong Buy).
ARCH CAP GP LTD (ACGL): Free Stock Analysis Report
AXIS CAP HLDGS (AXS): Free Stock Analysis Report
MONTPELIER RE (MRH): Free Stock Analysis Report
XL GROUP PLC (XL): Free Stock Analysis Report
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