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We are reiterating our Outperform recommendation on Everest Re Group Ltd. (RE - Analyst Report). The company has been performing favorably over the past many quarters and we expect the momentum to continue given its strong balance sheet profile along with its ability to perform favorably amidst tough market conditions, with a seasoned management team and huge market share in the insurance and reinsurance industry. 
 
Why Reiteration?
 
Everest Re boasts of a superior risk-adjusted capital position, long-term track record of generating favorable earnings, experienced management team and market profile as a leading global provider of insurance and reinsurance products. 
 
Everest Re is witnessing improving rates in its reinsurance and insurance lines of businesses. 
 
The company has also derived top-line growth in the past few years from its overseas business and the trend is expected to continue in the future.
 
Everest Re’s 10-year average combined ratio has remained below the breakeven levels which signify its underwriting profitability. 
 
However, exposure to cat losses and low interest rate environment are some of the headwinds.
 
Everest Re has also been generating stable cash flows from operations. Its balance sheet is supported by its conservative investment strategy with the current investment portfolio held at a shorter duration and equities at less than 10% of total investments.
 
Everest Re has been witnessing rising earnings estimates. Over the last 60 days, the Zacks Consensus Estimate for 2013 moved up by 3.3% to $18.8 as 3 of the 9 estimates moved north. The expected long term earnings growth is 14.6%. 
 
Other Stocks to Consider
 
Besides Everest Re, Alleghany Corp. (Y - Snapshot Report), Global Indemnity plc (GBLI), and Montpelier Re Holdings Ltd. (MRH - Analyst Report) carrying Zacks Rank #1 (Strong Buy), look impressive. 

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