Back to top

Analyst Blog

On Jun 13, Zacks Investment Research upgraded American Safety Inc. to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

American Safety has been witnessing rising earnings estimates on the back of strong first-quarter 2013 results, which included a 18.9% positive earnings surprise. Moreover, this property and casualty insurer delivered positive earnings surprises in 2 out of the last 3 quarters with an average beat of 1.99%.

The year-to-date return for the stock came in at 53.0%, way above the S&P 500’s return of 13.06%.

American Safety reported its first-quarter results on May 8, 2013. Net operating earnings per share came in at 44 cents per share surpassing the Zacks Consensus Estimate of 37 cents per share. Results also improved 15.8% year over year from 38 cents per share in the first quarter of 2012.

Top line improved 3.3% year over year to $72.3 million, driven by strong improvement in net premiums earned, net realized gains and fee income, partially mitigated by lower investment income.

During the quarter, American Safety repurchased 0.1 million shares for approximately $2.7 million to enhance investor confidence.

Additionally, on Jun 3, Fairfax Financial Holdings Limited announced a deal to acquire the outstanding shares of American Safety for $29.25 per share which was at a 22.1% premium to the closing price of American Safety as of May 31, 2013. The investment community responded positively to the news and share price of American Safety hit a 52-week high within a week of the announcement.

The Zacks Consensus Estimate for 2013 increased 5.3% to $1.58 per share as 1 of 2 estimates was revised higher over the last 30 days. The estimate also represents a whopping year-over-year increase of 650%. The Zacks Consensus Estimate for 2014 also increased approximately 3% to $1.73 as 1 of 2 estimates moved north over the last 30 days. The estimate translates into a year-over-year improvement of 9.5%.

Other Stocks to Consider

Among other insurers, Montpelier Re Holdings Limited (MRH - Analyst Report), Platinum Underwriters Holdings Ltd. (PTP - Snapshot Report) and Homeowners Choice Inc. (HCI - Snapshot Report) carry a Zacks Rank #1 (Strong Buy) and are worth noting.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
SUPER MICRO… SMCI 27.00 +10.25%
CANADIAN SO… CSIQ 38.34 +8.18%
BANCO DO BR… BDORY 16.78 +8.05%
CENTURY ALU… CENX 26.97 +7.97%
WILLDAN GRO… WLDN 11.38 +5.86%