Strength Seen in James River Group (JRVR): Can Its 17.5% Jump Turn into More Strength?
James River Group (JRVR) shares soared 17.5% in the last trading session to close at $7.93. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 36.3% loss over the past four weeks.
Global Indemnity recently made an offer to acquire James River in an all-stock deal valued at $15 a share, implying a total valuation of JRVR at around $550 million.
James River Group continues to witness strong investment income and profitable underwriting results from continuing operations, particularly from the Excess and Surplus Lines segment.
James River has successfully increased rates in the Excess and Surplus Lines segment. Pricing on the E&S renewal book has increased for 28 consecutive quarters.
In 2023, the company undertook several strategic actions to focus its business around the higher-returning U.S. insurance businesses.
This insurance holding company is expected to post quarterly earnings of $0.39 per share in its upcoming report, which represents a year-over-year change of -30.4%. Revenues are expected to be $183.9 million, down 21.9% 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 James River Group, the consensus EPS estimate for the quarter has been revised 11.4% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on JRVR going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
James River Group is part of the Zacks Insurance - Multi line industry. CNO Financial (CNO), another stock in the same industry, closed the last trading session 0.7% higher at $26.49. CNO has returned -4.2% in the past month.
CNO's consensus EPS estimate for the upcoming report has changed +1.4% over the past month to $0.71. Compared to the company's year-ago EPS, this represents a change of +39.2%. CNO currently boasts a Zacks Rank of #1 (Strong Buy).
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James River Group Holdings, Ltd. (JRVR) : Free Stock Analysis Report
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