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Arch Capital (ACGL) Rallies 20% in a Year: More Upside Left?
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Shares of Arch Capital Group Ltd. (ACGL - Free Report) have rallied 20.3% in a year against the industry’s decrease of 5.6%. The Finance sector and the Zacks S&P 500 composite have decreased 11.5% and 12.2%, respectively, in the said time frame. With a market capitalization of $17.5 billion, the average volume of shares traded in the last three months was 1.5 million.
Image Source: Zacks Investment Research
New business opportunities, rate increases, growth in existing accounts and solid capital position continue to drive this Zacks Rank #1 (Strong Buy) insurer, which has a decent track of beating earnings estimates in three of the last four reported quarters.
Return on equity in the trailing 12 months was 14.5%, better than the industry average of 5.6%. This highlights the company’s efficiency in utilizing shareholders’ fund.
The Zacks Consensus Estimate for 2022 and 2023 earnings has moved north by 9.4% and 8.7%, respectively in the past 60 days, reflecting analyst optimism.
Can It Retain the Momentum?
Arch Capital is a leading Specialty P&C and Mortgage Insurance business. It operates across a wide range of geographies and offers products that provide meaningful diversification and earnings stability. The expected long-term earnings growth rate is pegged at 10%.
The Zacks Consensus Estimate for 2022 earnings is pegged at $4.64 per share, indicating a year-over-year increase of 29.6% on 13.2% higher revenues of $9.6 billion. The consensus estimate for 2023 earnings is pegged at $5.48 per share, up 18.1% on 17.6% higher revenues of $11.3 billion.
This insurer boasts a brilliant track record of net premiums written that should continue to benefit from new business opportunities; rate increases, growth in existing accounts and growth in Australian single premium mortgage insurance.
Growth strategy to diversify its Mortgage Insurance business via strategic acquisitions that also complement the strength in the specialty insurance and reinsurance businesses.
Strategic buyouts have been helping Arch Capital expand internationally, add capabilities, enhance operations and diversify its business at attractive risk-adjusted returns.
Arch Capital has a solid balance sheet with high liquidity and low leverage, shielding it from market volatility. This, in turn, helps ACGL retain its financial strength and flexibility required to pursue new opportunities in keeping with its long-term strategy. ACGL has $606.6 million remaining under its buyback authorization.
This insurer has an impressive Value Score of A. Back-tested results show that stocks with a Value Score of A or B, when combined with a Zacks Rank #1 or Zacks Rank #2 (Buy), are the best investment bets.
The Zacks Consensus Estimate for Berkshire Hathaway’s 2022 and 2023 earnings implies 14.4% and 5.9% year-over-year growth, respectively. The average four-quarter surprise is 17.55%.
The Zacks Consensus Estimate for BRK.B’s 2022 and 2023 earnings has moved 7.6% and 8.8% north, respectively, in the past 60 days. Year to date, shares of BRK.B have lost 6.9%.
American Financial’s earnings surpassed estimates in the last four quarters, the average earnings surprise being 37.09%.
The Zacks Consensus Estimate for AFG’s 2022 and 2023 earnings has moved 1% each north, respectively, in the past 30 days. Year to date, shares of AFG have lost 5.4%.
The Zacks Consensus Estimate for W.R. Berkley’s 2022 and 2023 earnings implies 20.6% and 10.4% year-over-year growth, respectively. The average four-quarter surprise is 29.95%.
The Zacks Consensus Estimate for WRB’s 2022 and 2023 earnings has moved 8.8% and 6.8% north in the past 60 days, respectively. Year to date, shares of WRB have rallied 21.5%.
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Arch Capital (ACGL) Rallies 20% in a Year: More Upside Left?
Shares of Arch Capital Group Ltd. (ACGL - Free Report) have rallied 20.3% in a year against the industry’s decrease of 5.6%. The Finance sector and the Zacks S&P 500 composite have decreased 11.5% and 12.2%, respectively, in the said time frame. With a market capitalization of $17.5 billion, the average volume of shares traded in the last three months was 1.5 million.
Image Source: Zacks Investment Research
New business opportunities, rate increases, growth in existing accounts and solid capital position continue to drive this Zacks Rank #1 (Strong Buy) insurer, which has a decent track of beating earnings estimates in three of the last four reported quarters.
Return on equity in the trailing 12 months was 14.5%, better than the industry average of 5.6%. This highlights the company’s efficiency in utilizing shareholders’ fund.
The Zacks Consensus Estimate for 2022 and 2023 earnings has moved north by 9.4% and 8.7%, respectively in the past 60 days, reflecting analyst optimism.
Can It Retain the Momentum?
Arch Capital is a leading Specialty P&C and Mortgage Insurance business. It operates across a wide range of geographies and offers products that provide meaningful diversification and earnings stability. The expected long-term earnings growth rate is pegged at 10%.
The Zacks Consensus Estimate for 2022 earnings is pegged at $4.64 per share, indicating a year-over-year increase of 29.6% on 13.2% higher revenues of $9.6 billion. The consensus estimate for 2023 earnings is pegged at $5.48 per share, up 18.1% on 17.6% higher revenues of $11.3 billion.
This insurer boasts a brilliant track record of net premiums written that should continue to benefit from new business opportunities; rate increases, growth in existing accounts and growth in Australian single premium mortgage insurance.
Growth strategy to diversify its Mortgage Insurance business via strategic acquisitions that also complement the strength in the specialty insurance and reinsurance businesses.
Strategic buyouts have been helping Arch Capital expand internationally, add capabilities, enhance operations and diversify its business at attractive risk-adjusted returns.
Arch Capital has a solid balance sheet with high liquidity and low leverage, shielding it from market volatility. This, in turn, helps ACGL retain its financial strength and flexibility required to pursue new opportunities in keeping with its long-term strategy. ACGL has $606.6 million remaining under its buyback authorization.
This insurer has an impressive Value Score of A. Back-tested results show that stocks with a Value Score of A or B, when combined with a Zacks Rank #1 or Zacks Rank #2 (Buy), are the best investment bets.
Other Stocks to Consider
Some other top-ranked stocks from the insurance industry are Berkshire Hathaway (BRK.B - Free Report) , American Financial Group (AFG - Free Report) and W.R. Berkley Corporation (WRB - Free Report) , each sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Berkshire Hathaway’s 2022 and 2023 earnings implies 14.4% and 5.9% year-over-year growth, respectively. The average four-quarter surprise is 17.55%.
The Zacks Consensus Estimate for BRK.B’s 2022 and 2023 earnings has moved 7.6% and 8.8% north, respectively, in the past 60 days. Year to date, shares of BRK.B have lost 6.9%.
American Financial’s earnings surpassed estimates in the last four quarters, the average earnings surprise being 37.09%.
The Zacks Consensus Estimate for AFG’s 2022 and 2023 earnings has moved 1% each north, respectively, in the past 30 days. Year to date, shares of AFG have lost 5.4%.
The Zacks Consensus Estimate for W.R. Berkley’s 2022 and 2023 earnings implies 20.6% and 10.4% year-over-year growth, respectively. The average four-quarter surprise is 29.95%.
The Zacks Consensus Estimate for WRB’s 2022 and 2023 earnings has moved 8.8% and 6.8% north in the past 60 days, respectively. Year to date, shares of WRB have rallied 21.5%.