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Here's Why Investors Should Bet on Amerisafe (AMSF) Stock Now
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Amerisafe, Inc. (AMSF - Free Report) has emerged as a lucrative investment option, courtesy of its expertise on insuring employers in hazardous industries, favorable underwriting results and solid cash position. In fact, these factors also instill optimism in the stock’s long-term prospects.
Let’s analyze the factors that make this stock a compelling choice for investors right now.
Impressive Earnings Surprise History: Amerisafe boasts an impressive earnings surprise record. The company’s bottom line outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 64.85%.
Positive Estimate Revision: The Zacks Consensus Estimate for current-quarter and current-year earnings have been revised upward by 6.5% and 15.3%, respectively, over the past 30 days.
Strong Operating Profit: Amerisafe’s trailing 12-month return on equity (ROE) reinforces its growth potential. The company’s ROE of 20.2% has improved in the past two years, comparing favorably with the industry’s ROE of 11.9%. This, in turn, reflects its tactical efficiency in utilizing its shareholders’ funds.
Intensified Focus on Catering to Hazardous Industries: The company’s credibility can be gauged from the fact that it has been offering workers’ compensation insurance for employers in hazardous industries for 34 years. With a focus on serving small to mid-sized employers, Amerisafe presently has active areas of operations across 27 states. The primary reason for insuring hazardous industry employers can be attributed to the nature of the work in these high hazard-industries, which can result in severe injuries and even death. Notably, Amerisafe has been benefiting the abovementioned employers with not only improved premium payment plans but has also been making efforts to reduce the overall claim costs.
Skilled Underwriting & Claims Management Expertise: Equipped with specialised knowledge regarding hazardous industries, Amerisafe has been rolling out industry specific risk analysis and rating tools. These have been not only aiding the company’s underwriters to take risk selection and pricing decisions but also helped in retention of policies. The company’s disciplined approach to underwriting the hazardous industries is evident from the fact that the combined ratio has remained below 100% since 2006, except in 2011.
Moreover, Amerisafe has been striving hard to offer safety services, which intend to pave the way for safer workplaces by limiting the occurrence of workplace injuries and the high costs associated with it. As a matter of fact, employers in hazardous industries are plagued with less frequent but more severe claims. To bring about favorable claim outcomes or accelerated closure of claims, the company makes use of intensive claims management practices aimed at bringing down the overall claim costs.
Robust Cash Position: The company’s cash position looks strong as of Sep 30, 2020, evident from its cash and cash equivalents that increased to two-fold from 2019-end level. Another noteworthy thing is that the balance sheet is devoid of any debt. A robust cash balance and adequate cash flow levels have provided enough financial flexibilities for Amerisafe to not only undertake several growth-related initiatives but has also paved the way for engaging in prudent shareholder-friendly moves through dividend payments.
Price Performance
Shares of Amerisafe have declined 14.7% in a year compared with the industry’s loss of 10.6%.
The price performance looks decent in comparison to its industry peers, namely, Aflac Incorporated (AFL - Free Report) , Employers Holdings, Inc. (EIG - Free Report) and Unum Group (UNM - Free Report) , which lost 14%, 23.9% and 24%, respectively, in a year.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Here's Why Investors Should Bet on Amerisafe (AMSF) Stock Now
Amerisafe, Inc. (AMSF - Free Report) has emerged as a lucrative investment option, courtesy of its expertise on insuring employers in hazardous industries, favorable underwriting results and solid cash position. In fact, these factors also instill optimism in the stock’s long-term prospects.
The stock currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Let’s analyze the factors that make this stock a compelling choice for investors right now.
Impressive Earnings Surprise History: Amerisafe boasts an impressive earnings surprise record. The company’s bottom line outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 64.85%.
Positive Estimate Revision: The Zacks Consensus Estimate for current-quarter and current-year earnings have been revised upward by 6.5% and 15.3%, respectively, over the past 30 days.
Strong Operating Profit: Amerisafe’s trailing 12-month return on equity (ROE) reinforces its growth potential. The company’s ROE of 20.2% has improved in the past two years, comparing favorably with the industry’s ROE of 11.9%. This, in turn, reflects its tactical efficiency in utilizing its shareholders’ funds.
Intensified Focus on Catering to Hazardous Industries: The company’s credibility can be gauged from the fact that it has been offering workers’ compensation insurance for employers in hazardous industries for 34 years. With a focus on serving small to mid-sized employers, Amerisafe presently has active areas of operations across 27 states. The primary reason for insuring hazardous industry employers can be attributed to the nature of the work in these high hazard-industries, which can result in severe injuries and even death. Notably, Amerisafe has been benefiting the abovementioned employers with not only improved premium payment plans but has also been making efforts to reduce the overall claim costs.
Skilled Underwriting & Claims Management Expertise: Equipped with specialised knowledge regarding hazardous industries, Amerisafe has been rolling out industry specific risk analysis and rating tools. These have been not only aiding the company’s underwriters to take risk selection and pricing decisions but also helped in retention of policies. The company’s disciplined approach to underwriting the hazardous industries is evident from the fact that the combined ratio has remained below 100% since 2006, except in 2011.
Moreover, Amerisafe has been striving hard to offer safety services, which intend to pave the way for safer workplaces by limiting the occurrence of workplace injuries and the high costs associated with it. As a matter of fact, employers in hazardous industries are plagued with less frequent but more severe claims. To bring about favorable claim outcomes or accelerated closure of claims, the company makes use of intensive claims management practices aimed at bringing down the overall claim costs.
Robust Cash Position: The company’s cash position looks strong as of Sep 30, 2020, evident from its cash and cash equivalents that increased to two-fold from 2019-end level. Another noteworthy thing is that the balance sheet is devoid of any debt. A robust cash balance and adequate cash flow levels have provided enough financial flexibilities for Amerisafe to not only undertake several growth-related initiatives but has also paved the way for engaging in prudent shareholder-friendly moves through dividend payments.
Price Performance
Shares of Amerisafe have declined 14.7% in a year compared with the industry’s loss of 10.6%.
The price performance looks decent in comparison to its industry peers, namely, Aflac Incorporated (AFL - Free Report) , Employers Holdings, Inc. (EIG - Free Report) and Unum Group (UNM - Free Report) , which lost 14%, 23.9% and 24%, respectively, in a year.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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