Back to top

Analyst Blog

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at or call 800-767-3771 ext.  9339.

On Feb 14, Zacks Investment Research upgraded AmTrust Financial Services Inc. (AFSI - Snapshot Report) by a notch to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

AmTrust has been experiencing rising earnings estimates on the back of robust fourth-quarter 2013 results. Improved market trends stemmed from incremental agency acquisitions and a healthy capital position, which in turn, paved the way for the recent approval of its first stock repurchase program since 2007.

Additionally, this specialty property-casualty insurer delivered positive earnings surprises in the last 4 quarters with an average beat of 16.5%. On Feb 13, AmTrust reported fourth-quarter 2013 operating earnings per share of $1.03, which outpaced the Zacks Consensus Estimate of 80 cents by about 29% as well as the year-ago quarter number of 70 cents by 47%.

Robust year-over-year growth of 84.6% in net earned premiums along with a 71.9% surge in service and fee income boosted the top line, margins and bottom line. Despite higher underwriting and acquisition expenses, combined ratio witnessed improvement. Moreover, capital position remained sturdy with appreciated cash position, book value per share and return on equity (ROE).

Going ahead, the recent acquisitions of Insco Dico Group and Sagicor Europe Ltd. are expected to be accretive to AmTrust’s earnings in 2014 and beyond. Moreover, the pending purchase of renewal rights and assets of the commercial lines insurance operations of Canopius Holdings Bermuda Ltd. (TWGP - Analyst Report), by mid-2014, is deemed positive. AmTrust’s creditworthiness,prudent risk management, diversified product portfolio and effective capital deployment also score well with the ratings agencies and investors.

Based on AmTrust’s fundamental strength and prudent capital management, the Zacks Consensus Estimate for 2014 rose 5.4% to $3.92 per share in the last 7 days. Meanwhile, the estimate for 2015 grew 1.6% to $4.45 during the same period.

Moreover, the Most Accurate estimate for AmTrust’s 2014 and 2015 earnings stands at $4.18 and $4.60 a share, resulting in an Earnings ESP of +6.6% and +3.4%, respectively. Furthermore, no downward revision in estimates was witnessed for both the years.

Other Stocks to Consider

Besides AmTrust, other top-ranked insurers in the industry include RLI Corp. (RLI - Analyst Report) and OneBeacon Insurance Group Ltd. (OB - Snapshot Report). Both these stocks sport the same Zacks Rank as AmTrust.

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

Learn more

Start for as little as $4.50 per trade.

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
DIXIE GROUP DXYN 15.84 +7.90%
BOFL HOLDING BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%