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The Zacks Analyst Blog Highlights: Verizon Communications, TELUS Corporation, BCE, Rogers Communications and Eastern Insurance Holdings

Zacks Equity Research

For Immediate Release

Chicago, IL – August 19, 2013 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Verizon Communications Inc. (VZ-Free Report), TELUS Corporation (TU-Free Report), BCE, Inc. (BCE-Free Report), Rogers Communications Inc. (RCI-Free Report) and Eastern Insurance  Holdings Inc. (EIHI-Free Report).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Friday’s Analyst Blog:

Verizon Delays Canada Acquisitions

Verizon Communications Inc. (VZ-Free Report) has reportedly postponed the acquisitions of Canadian telecom provider Wind Mobile and Mobilicity. The company is waiting for the government auction in Canada for wireless licenses in January next year before entering the Canadian market. Previously, Verizon proposed to acquire Wind Mobile for $700 million and reportedly entered a non-disclosure agreement with Mobility for a buyout.

According to reports, the company is now focusing on participating in the upcoming auction of the 700-megahertz band spectrum. News reports also suggest that if Verizon  wins, it might reconsider its purchase plans or go ahead next year. 

Despite the small stature, we believe these companies would mark a significant stepping stone for the company in Canada.  Wind Mobile, which began its operations in 2009, has around 600,000 customers, which has almost surpassed wirelesses subscriber base of the fourth largest wireless Canadian carriers - Saskatchewan Telecommunications Holding Corporation.  Further, Mobilicity – an acquisition targeted by Telus in the past – has around 250, 000 subscribers. Although Mobilicity has undertaken no major expansion in the last two years, it continues to operate in key areas like Greater Toronto Area, Ottawa, Calgary, Edmonton and Greater Vancouver.

We believe the company’s entry into new markets like Canada would provide a significant opportunity to grow beyond the saturation of the U.S. wireless market. 

However, the news of possible takeovers in Canada by telecom giant Verizon has stirred volatilities for tier one Canadian telecom carriers like TELUS Corporation (TU-Free Report), BCE, Inc. (BCE-Free Report) and Rogers Communications Inc. (RCI-Free Report). The market has been on the sidelines over these carriers, which pulled down their market valuation. To tide over the debilitating scenario, Rogers attempted to hinder Verizon's possible market entry by proposing a buyout to these two carriers in private equity bids. We believe with more companies eyeing Canadian takeover, Verizon will face many contenders ahead.

Verizon, currently has Zacks Rank #3 (Hold).

Eastern Insurance: A Strong Buy

On Aug 15, 2013, Zacks Investment Research upgraded Eastern Insurance  Holdings Inc. (EIHI-Free Report) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Eastern Insurance has been experiencing rising earnings estimates on the back of improved second-quarter 2013 results. Moreover, strong underwriting performance, agency relationships and a healthy capital position have been impressive. Additionally, this multi-line insurer delivered positive earnings surprises in all of the last 4 quarters with an average beat of 22%.

On Aug 1, Eastern Insurance reported second-quarter 2013 operating earnings per share of 39 cents, which outpaced the Zacks Consensus Estimate of 30 cents and year-ago quarter number of 17 cents.

Total revenue grew 21.1% year over year, driven by a 17.6% upsurge in premiums along with higher investment income and realized gains. These were partially offset by 16% growth in total expenses. Other growth metrics such as combined ratio and book value per share witnessed improvement.


Eastern Insurance’s strategic focus on organic growth and initiatives to expand in the emerging markets are showing results. Moreover, the company is gaining traction in both its workman’s compensation insurance as well as reinsurance and other businesses, given the improvement in premium retention rates. Alongside, prudent expense and risk management as well as strong capitalization scores well with the ratings agencies, reflecting a strong long-term growth potential.

Based on Eastern Insurance’s fundamental strength and capital management, the Zacks Consensus Estimate for 2013 rose 3.0% to $1.38 per share in the last 30 days. Moreover, the estimate for 2014 jumped 9.7% to $1.70 for the same period. Meanwhile, no downward revision in estimates was witnessed for both the years.

Moreover, the Most Accurate Estimate for Eastern Insurance’s 2013 earnings stands at $1.50 a share, resulting in a positive Earnings ESP (Read: Zacks Earnings ESP: A Better Method) of 8.7%.

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

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