Strength Seen in Heritage Insurance (HRTG): Can Its 16.5% Jump Turn into More Strength?
Heritage Insurance (HRTG) shares rallied 16.5% in the last trading session to close at $6.13. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 9.1% gain over the past four weeks.
Rate adequacy, selective underwriting and restricting new business for policies written in over-concentrated markets or products should drive underwriting profitability. Strategically diversified portfolio helps it to achieve better risk distribution, claims trends, and lower reinsurance costs.
Organic growth drives premium for HRTG. Rating actions continue to drive in-force premium. The vertically integrated structure benefits loss, LAE and operating expenses, thus lowering earnings volatility.
A disciplined capital allocation approach fuels premium growth in Mid-Atlantic, West, Pacific regions and selected classes in the Northeast.
This property and casualty insurance holding company is expected to post quarterly loss of $0.18 per share in its upcoming report, which represents a year-over-year change of +90.2%. Revenues are expected to be $176.11 million, up 6.4% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For Heritage Insurance, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on HRTG going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Heritage Insurance belongs to the Zacks Insurance - Property and Casualty industry. Another stock from the same industry, Root, Inc. (ROOT), closed the last trading session 1.5% lower at $9.75. Over the past month, ROOT has returned -6.5%.
For Root, Inc. , the consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$3.29. This represents a change of +27.5% from what the company reported a year ago. Root, Inc. currently has a Zacks Rank of #3 (Hold).
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Heritage Insurance Holdings, Inc. (HRTG) : Free Stock Analysis Report
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