Back to top

Analyst Blog

Zacks Investment Research downgraded Selective Insurance Group, Inc. (SIGI - Snapshot Report) to a Zacks Rank #4 (Sell) on Dec 24, 2013.

Why the Downgrade?

Selective Insurance witnessed downward estimate revisions after reporting mixed third-quarter 2013 results. Additionally, Selective Insurance delivered negative earnings surprise in two out of the last three quarters. Over the last 30 days, estimates moved downwards leading to an approximately 2% decline in the Zacks Consensus Estimate for full year 2013 to $1.61 per share.

On Oct 30, Selective Insurance reported third-quarter earnings per share of 42 cents, which although higher than the year-ago earnings, missed the Zacks Consensus Estimate by 4.6%.

The quarter experienced an increase in total expenses due to higher loss and loss expense and policy acquisition costs. Catastrophe losses and interest expense also increased during the quarter. Further, over the last nine months of 2013, the debt burden of Selective Insurance increased approximately 28% from year end 2012 leading to deterioration in the debt-to-capital ratio.

Additionally, the company expects the weighted average share outstanding to be around 57 million for full year 2013, higher than the earlier guidance of 56 million. Higher share count might affect earnings per share adversely in the upcoming period.

Other Stocks to Consider

However, some better-ranked stocks in the property and casualty insurance space include Allied World Assurance Company Holdings, AG (AWH - Snapshot Report), AmTrust Financial Services, Inc. (AFSI - Snapshot Report) and Arch Capital Group Ltd. (ACGL - Snapshot Report). While Allied World and AmTrust Financial carry a Zacks Rank #1 (Strong Buy), Arch Capital carries a Zacks Rank #2 (Buy).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

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 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
PLANAR SYST… PLNR 4.34 +4.58%
CENTURY ALU… CENX 22.47 +4.22%
ERBA DIAGNO… ERB 2.89 +3.58%
MALLINCKROD… MNK 71.96 +3.50%
GTT COMMUNI… GTT 12.00 +3.00%