Should AmTrust Financial (AFSI) be in Your Portfolio Now?
On Oct 9, Zacks Investment Research upgraded AmTrust Financial Services, Inc. (AFSI) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
AmTrust Financial has witnessed rising earnings estimates on the back of its compelling inorganic growth story and strong earnings results.
To ramp up its growth profile, AmTrust Financial recently acquired Florida-based Comp Options Insurance Company, Inc. or Comp Options, a subsidiary of Blue Cross & Blue Shield.
With this acquisition, AmTrust Financial has strengthened its presence in Florida, one of the major markets for workers' compensation insurance risks. The company intends to continue working with Florida Blue with access to its wide range of sales network and new approach to medical cost management. This in turn will generate cost synergies and increase shareholder value.
Earlier AmTrust Financial had acquired renewal rights to Tower’s commercial lines business.
With respect to earnings performance AmTrust Financial delivered positive earnings surprises in the trailing four quarters, with an average beat of 26.7%.
In the last reported quarter, AmTrust Financial’s earnings topped the Zacks Consensus Estimate by 33% and were higher than the year-ago quarter figure by 79%, driven by solid organic growth. The top line also surpassed the Zacks Consensus Estimate. Notably, gross written premiums rose for fifth straight quarters to $1.44 billion.
The company’s strong inorganic growth and stellar performance prompted upward revisions in the Zacks Consensus Estimate for 2014 and 2015, which moved up 4% and 1.7 % to $4.95 and $5.34 respectively, over the last 60 days. The expected long-term growth rate for the stock is 15%.
Other Stocks to Consider
Investors interested in the same sector could also consider stocks like Alleghany Corporation (Y), Argo Group International Holdings, Ltd. (AGII) and Aspen Insurance Holdings Ltd. (AHL). All of these have the same Zacks rank as AmTrust Financial.
Read the Full Research Report on Y
Read the Full Research Report on AFSI
Read the Full Research Report on AGII
Read the Full Research Report on AHL
Zacks Investment Research
