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On Feb 22, Zacks Investment Research upgraded EMC Insurance Group Inc. (EMCI - Snapshot Report) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

EMC Insurance Group delivered a strong fourth-quarter performance with a positive earnings surprise of 32%. The company managed to post positive earnings surprise after three quarters.

Premiums earned improved 4.9%, while combined ratio improved 640 basis points year over year.

The long-term expected earnings growth rate for this stock is 5%.   The company expects to deliver operating earnings between $2.40 and $2.65 per share in 2013.

EMC Insurance Group reported its fourth-quarter results on Feb 20. Non-GAAP earnings per share came in at 99 cents, surpassing the Zacks Consensus Estimate by 32%. However, it lagged the year-ago number by 71%.

The upside was largely due to higher top line coupled with lower expenses.

The Zacks Consensus Estimate for 2013 is $2.50 per share as 1 estimate was revised higher over the last 7 days, pushing the Zacks Consensus Estimate by 35%. The current estimate is a few cents above the midpoint of the guidance range provided by EMC Insurance Group. For 2014, 1 estimate moved higher over the same time frame, lifting the Zacks Consensus Estimate by 10.3% to $3.22 per share.

Other Stocks to Consider

Property & casualty insurers Allied World Assurance Co Holding (AWH - Snapshot Report), Cincinnati Financial Corp. (CINF - Analyst Report) and  Navigators Group Inc. (NAVG - Snapshot Report), among other, carry a Zacks Rank #1 (Strong Buy) and are worth noting.

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