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W. R. Berkley Corp Scales 52-Week High on Strong Q2 Results

Zacks Equity Research

On Aug 18, 2014, property and casualty insurer W. R. Berkley Corp. ( WRB) surged to a 52-week high of $47.41. The rally in the stock was driven by strong second-quarter earnings. The average trading volume for the session was nearly 0.5 million shares.


Year-to-date, the stock is up 11%, which was more than the S&P 500’s increase of 7.6%.


Growth Drivers 


W.R. Berkley Corp. came up with another encouraging quarterly performance beating on both the top and the bottom line. The company’s core operating earnings of 82 cents per share beat the Zacks Consensus Estimate by 5.1%. Earnings also surged 17.1% year over year led by growth in premiums written, pricing increases and cost control along with a lower share count.


Revenues came in at $1.80 billion, up 14.4% year over year and significantly above the Zacks Consensus Estimate of $1.62 billion. The year-over-year increase was attributable to higher premiums earned, increased net investment gains, higher income from wholly owned investees partly offset by lower investment income.


Investors are optimistic about the stock given that W.R. Berkley Corp. delivered a positive surprise over the last four quarters, with an average beat of 12.7%.


W.R. Berkley Corp.’s intelligent use of capital via share buyback and increase in dividend also draws investors. Earlier during the month, the company announced that it will pay its quarterly dividend of 11 cents per share on Oct 1. The company made a 10% hike to its annual dividend in May 2014. 


W.R. Berkley Corp.’s recently issued senior notes have also garnered investment grade ratings from A.M. Best. This reflects the creditworthiness of the issuer. 


Estimates Revision Show Strength


Over the last 30 days, the Zacks Consensus Estimate for 2014 earnings per share climbed up 3.4% to $3.62. 


Other Stocks to Consider


Other players worth considering include Endurance Specialty Holdings Ltd. ( ENH), Global Indemnity plc ( GBLI) and Mercury General Corp. ( MCY). All these stocks carry a Zacks Rank #1 (Strong Buy).

Read the Full Research Report on WRB
Read the Full Research Report on ENH
Read the Full Research Report on MCY
Read the Full Research Report on GBLI

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