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.
Can Arthur J. Gallagher (AJG) Keep Growing on Acquisitions?
Read MoreHide Full Article
Arthur J. Gallagher & Co. (AJG - Free Report) remains on the growth track supported by its strategic acquisition and mergers. Notably, the company evolved from a small retail presence in Australia, Canada and New Zealand to one of the top five brokers globally.
Arthur J. Gallagher made 28 acquisitions since January through October this year with annualized revenues of $97.4 million. In November, the insurance broker acquired London-based Argentis, Altman & Cronin Benefit Consultants in the U.S., and Michigan-based Regency Group.
Arthur J. Gallagher has also accelerated its acquisition activity in the retail employee benefits brokerage and wholesale brokerage space. The company intends to pursue smaller tuck-in mergers in 2017. These acquisitions have not only expanded the company’s global footprint but also added capabilities to its suit of products and services.
Strategic buyouts, along with organic initiatives, have been fueling top-line growth for years, increasing at a four-year CAGR of 26% in 2015.
Shares of Arthur J. Gallagher have increased 1.21% in the last one month compared with the Zacks categorized Insurance Broker industry’s 3.54%. The estimates have also moved down in the last few weeks. Nonetheless, we believe that the above-mentioned growth drivers will help the stock to turn around.
Also, this Zacks Rank #3 (Hold) insurer has delivered positive surprise in the last four quarters with an average beat of 6.3%. The long-term expected earnings growth is pegged at 9%. Price earnings growth ratio, which determines the relative trade-off between the price of a stock, the earnings generated per share, and the company's expected growth, is 1.99. This is above the industry average of 1.67. The company has seen its 2016 estimates moving north by more than 1% over the last 60 days.
Alleghany Corporation, which is engages in P&C reinsurance and insurance businesses in the U.S. and internationally, beat estimates in three of the last four quarters with an average positive surprise of 20.52%.
Arch Capital, a provider of property, casualty, and mortgage insurance and reinsurance products worldwide surpassed estimates in the last four quarters with an average positive surprise of 9.27%.
First American Financial, a provider of financial services, surpassed estimates in the last four quarters with an average positive surprise of 14.32%.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free>>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Can Arthur J. Gallagher (AJG) Keep Growing on Acquisitions?
Arthur J. Gallagher & Co. (AJG - Free Report) remains on the growth track supported by its strategic acquisition and mergers. Notably, the company evolved from a small retail presence in Australia, Canada and New Zealand to one of the top five brokers globally.
Arthur J. Gallagher made 28 acquisitions since January through October this year with annualized revenues of $97.4 million. In November, the insurance broker acquired London-based Argentis, Altman & Cronin Benefit Consultants in the U.S., and Michigan-based Regency Group.
Arthur J. Gallagher has also accelerated its acquisition activity in the retail employee benefits brokerage and wholesale brokerage space. The company intends to pursue smaller tuck-in mergers in 2017. These acquisitions have not only expanded the company’s global footprint but also added capabilities to its suit of products and services.
Strategic buyouts, along with organic initiatives, have been fueling top-line growth for years, increasing at a four-year CAGR of 26% in 2015.
Shares of Arthur J. Gallagher have increased 1.21% in the last one month compared with the Zacks categorized Insurance Broker industry’s 3.54%. The estimates have also moved down in the last few weeks. Nonetheless, we believe that the above-mentioned growth drivers will help the stock to turn around.
Also, this Zacks Rank #3 (Hold) insurer has delivered positive surprise in the last four quarters with an average beat of 6.3%. The long-term expected earnings growth is pegged at 9%. Price earnings growth ratio, which determines the relative trade-off between the price of a stock, the earnings generated per share, and the company's expected growth, is 1.99. This is above the industry average of 1.67. The company has seen its 2016 estimates moving north by more than 1% over the last 60 days.
Stocks to Consider
Some better-ranked insurers that warrant a look include Alleghany Corporation , Arch Capital Group Ltd. (ACGL - Free Report) and First American Financial Corporation (FAF - Free Report) . All of these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Alleghany Corporation, which is engages in P&C reinsurance and insurance businesses in the U.S. and internationally, beat estimates in three of the last four quarters with an average positive surprise of 20.52%.
Arch Capital, a provider of property, casualty, and mortgage insurance and reinsurance products worldwide surpassed estimates in the last four quarters with an average positive surprise of 9.27%.
First American Financial, a provider of financial services, surpassed estimates in the last four quarters with an average positive surprise of 14.32%.
The Best Place to Start Your Stock Search
Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free>>