American Physicians Service (AMPH)

We are upgrading our recommendation on American Physicians Service Group (AMPH - Analyst Report) from Neutral to Outperform. American Physicians second quarter operating earnings of 82 cents per share were significantly ahead of the Zacks Consensus Estimate of 66 cents.

Results were driven by better-than-expected results in the Financial Service segment, strong policyholder retention and favorable developments from prior years. The company is also experiencing the benefits of the implementation of its cost containment measures.

Though declining rate continued to partially offset growth, policyholder retention, conservative reserve position and capital position augur well for a solid growth path with the market recovery.