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Why Is Amerisafe (AMSF) Down 5.9% Since Last Earnings Report?
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It has been about a month since the last earnings report for Amerisafe (AMSF - Free Report) . Shares have lost about 5.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Amerisafe due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Amerisafe Q4 Earnings Beat Estimates on Lower Expenses
Amerisafe Inc. reported fourth-quarter 2018 operating earnings per share of $1.07, beat the Zacks Consensus Estimate by 27.4%. In the year-ago quarter, the company reported earnings of 69 cents per share.
Better-than-expected earnings were driven by increase in net investment income and decline in total expenses.
Quarter in Detail
Amerisafe’s operating revenues increased 2.2% from the prior-year quarter to $97.1 million, surpassing the Zacks Consensus Estimate by 2%.
Gross written premiums in the quarter were down 7.1% year over year to $75.3 million, primarily due to lower voluntary premiums written, partly offset by increase in payroll audits and related premium adjustments.
Net investment income increased 10.2% year over year to $8.1 million, owing to higher yields on investment securities.
Total expenses came in at $71.9 million, down 6.8% from the year-ago quarter, thanks to lower loss and loss adjustments incurred. Net combined ratio, a measure of profitability (lower the better), was 81% compared with 88.3% in the year-ago quarter.
Financial Update
Amerisafe exited the quarter with cash and cash equivalents of $40.3 million, down 27.3% year over year.
As of Dec 31, 2018, total shareholders’ equity was $409.8 million, down 3.8% year over year.
Operating return on equity was 19%, up 760 basis points (bps) year over year.
Book value per share as of Dec 31, 2018, was $21.26, down 3.8% from Dec 31, 2017.
Dividend and Share Repurchase Update
The company increased its regular quarterly dividend by 14% to 22 cents per share. This dividend will be payable on Mar 22 to shareholders of record as of Mar 8, 2019.
During the quarter, no shares were repurchased under the company’s share repurchase plan.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
VGM Scores
Currently, Amerisafe has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Amerisafe has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Amerisafe (AMSF) Down 5.9% Since Last Earnings Report?
It has been about a month since the last earnings report for Amerisafe (AMSF - Free Report) . Shares have lost about 5.9% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Amerisafe due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Amerisafe Q4 Earnings Beat Estimates on Lower Expenses
Amerisafe Inc. reported fourth-quarter 2018 operating earnings per share of $1.07, beat the Zacks Consensus Estimate by 27.4%. In the year-ago quarter, the company reported earnings of 69 cents per share.
Better-than-expected earnings were driven by increase in net investment income and decline in total expenses.
Quarter in Detail
Amerisafe’s operating revenues increased 2.2% from the prior-year quarter to $97.1 million, surpassing the Zacks Consensus Estimate by 2%.
Gross written premiums in the quarter were down 7.1% year over year to $75.3 million, primarily due to lower voluntary premiums written, partly offset by increase in payroll audits and related premium adjustments.
Net investment income increased 10.2% year over year to $8.1 million, owing to higher yields on investment securities.
Total expenses came in at $71.9 million, down 6.8% from the year-ago quarter, thanks to lower loss and loss adjustments incurred. Net combined ratio, a measure of profitability (lower the better), was 81% compared with 88.3% in the year-ago quarter.
Financial Update
Amerisafe exited the quarter with cash and cash equivalents of $40.3 million, down 27.3% year over year.
As of Dec 31, 2018, total shareholders’ equity was $409.8 million, down 3.8% year over year.
Operating return on equity was 19%, up 760 basis points (bps) year over year.
Book value per share as of Dec 31, 2018, was $21.26, down 3.8% from Dec 31, 2017.
Dividend and Share Repurchase Update
The company increased its regular quarterly dividend by 14% to 22 cents per share. This dividend will be payable on Mar 22 to shareholders of record as of Mar 8, 2019.
During the quarter, no shares were repurchased under the company’s share repurchase plan.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
VGM Scores
Currently, Amerisafe has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Amerisafe has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.