Zacks Investment Research upgraded Platinum Underwriters Holdings Ltd. (PTP) to a Zacks Rank #1 (Strong Buy) on April 10, 2014.
Why the Upgrade?
Platinum Underwriters has been witnessing upward estimate revisions on the back of consistent capital deployment initiatives of the company. Returning of significant capital to shareholders has been of prime importance to the company that drove bullish sentiment leading to a 0.5% increase in the Zacks Consensus Estimate for full-year 2014 to $4.38 per share over the last 30 days.
Platinum Underwriters has consistently paid dividends and increased its share repurchases over the years to boost shareholders’ value and retain their confidence. The company’s share repurchases increased 22.2% in 2012 and a substantial 162.1% in 2013. Going forward, share repurchases are expected to increase further thereby reducing share count and enhancing earnings per share.
Platinum Underwriters is scheduled to report first-quarter 2014 earnings results on April 16, 2014, after the closing bell. Notably, the Zacks Consensus estimate for the first quarter is pegged at $1.24 per share. The combination of Platinum Underwriters’ Zacks Rank #1 and a positive Earnings ESP (Expected Surprise Prediction) of 12.10% keeps us optimistic about an earnings beat in the first quarter of 2014.
Platinum Underwriters’ fourth-quarter 2013 results also successfully exceeded the Zacks Consensus Estimate. With respect to earnings trend, performance of this property and casualty insurer has been impressive, as it delivered positive earnings surprises in all of the last four quarters with an average beat of 42.86%. Also, the long-term growth rate for the stock is 6.50%.
In fact, shares of the company also showed significant upward movement since it reported fourth-quarter 2013 results, increasing 8.1% to $59.99 per share on April 9, 2014. Moreover, the 1-year return from the stock is 8.66%.
Other Stocks to Consider
Other players in the property and casualty insurance space which look attractive at current levels include Alleghany Corp. (Y), EMC Insurance Group Inc. (EMCI) and Fidelity National Financial, Inc. (FNF). All three stocks carry the same Zacks Rank as Platinum Underwriters.