Back to top
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Genworth Financial, Inc. (GNW) - $25 value - yours FREE >>
We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Genworth Financial, Inc. (GNW) - $25 value - yours FREE >>
Image: Bigstock
Employers Holdings (EIG): Time to Dump Stock from Portfolio?
On Aug 19, Zacks Investment Research downgraded Employers Holdings, Inc. (EIG - Free Report) to a Zacks Rank #5 (Strong Sell).
Why the Downgrade?
Employers Holdings witnessed sharp downward estimate revisions after reporting disappointing second-quarter 2016 results. Shares of this accident and health insurer have been on a downtrend, losing 10% since it reported second-quarter results. Given its expected negative earnings growth rates for the upcoming quarters, it has more downside left.
On Jul 27, Employers Holdings reported earnings per share of 45 cents, missing the Zacks Consensus Estimate by 21.05%. Earnings also declined 12% year over year due to higher expenses.
Total expenses in the second quarter increased 6.3% attributable to higher losses and loss adjustment expenses and underwriting and other operating expenses.
New and renewal premiums slightly decreased due to the soft Southern California market.
The second quarter witnessed four large losses amounting to about $4.2 million or 13 cents per share. Employers Holdings’ combined ratio thus deteriorated 250 basis points. Underwriting income deteriorated owing to a higher current accident year loss estimate.
Return on equity also slumped 360 basis points to 12.8 while operating return on equity declined 150 basis points to 6.7%. Cash from operations through the first half decreased 34%.
The Zacks Consensus Estimate for 2016 moved down 17% to $2.00 per share as all the estimates were revised down over the last 30 days. For 2017 too, all the estimates were revised down over the same time frame, which dragged down the Zacks Consensus Estimate by 13% to $2.25 per share.
EMPLOYERS HLDGS Price and Consensus
EMPLOYERS HLDGS Price and Consensus | EMPLOYERS HLDGS Quote
Stocks to Consider
Not all insurers’ stocks are performing as poorly as Employers Holdings. Some better-ranked stocks are Genworth Financial Inc. (GNW - Free Report) , Primerica, Inc. (PRI - Free Report) and Universal American Corp. , each carrying a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>