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Platinum Upgraded to Strong Buy

Zacks Equity Research

On Apr 9, Zacks Investment Research upgraded Platinum Underwriters Holdings Limited (PTP) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Platinum Underwriters has been witnessed rising earnings estimates since it reported solid fourth-quarter results. The company delivered positive earnings surprises in 3 out of 4 quarters in 2012 with an average beat of 46.27%. The long-term expected earnings growth rate for this stock is 8%.    

Platinum Underwriters reported a net income of $327.2 million 2012, rebounding from a loss of $224.1 million in 2011. In addition, combined ratio also improved significantly in 2012. Results largely benefited from strong reserve releases and realized gains as well as moderate catastrophe losses.  

The year-to-date return for the stock came in at 22.21%, way above the S&P 500 return of 11.33%.

Platinum Underwriters continues to increase shareholders’ value through dividend payouts and share repurchases. In 2012, the company deployed $115.7 million to repurchase 3.1 million shares. It also paid quarterly cash dividends of 8 cents in 2012.
Additionally, due to the absence of any significant catastrophe event in the first quarter, the company’s underwriting performance is expected to deliver better results.

Platinum Underwriters is scheduled to release its first-quarter 2013 earnings results on Apr 17. The Zacks Consensus Estimate for the first quarter is currently pegged at $1.16 increasing 17.5% over the last 60 days and reflecting a year-over-year improvement of 30.71%.

Other Stocks to Consider

Other property and casualty insurers like Arch Capital Group Ltd. (ACGL), Cincinnati Financial Corporation (CINF) and AXIS Capital Holdings Limited (AXS), carry a Zacks Rank #1 (Strong Buy) and are worth noting.

Read the Full Research Report on CINF

Read the Full Research Report on AXS

Read the Full Research Report on ACGL

Read the Full Research Report on PTP

Zacks Investment Research

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