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RLI Corp. (RLI) Surges 3.1%: Is This an Indication of Further Gains?

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RLI Corp. (RLI - Free Report) shares ended the last trading session 3.1% higher at $132.22. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 0.6% loss over the past four weeks.

Diversified product portfolio, focus on introducing products, sturdy business expansion, sustained rate increase and expanded distribution resulting in operational strength drives RLI.

Investment in customer relationships, technology and people will help grow underwriting profits in the future. RLI is one of the industry’s most profitable property and casualty writers with an impressive track record of delivering 27 consecutive years of underwriting profitability.

RLI Corp. maintains a conservative underwriting and reserving policy and continues to achieve favorable reserve releases from the prior years. Such a robust capital position provides significant financial flexibility to the operating subsidiaries.

The company has been paying dividends for 186 consecutive quarters and has a dividend yield better than the industry’s average, making the stock an attractive pick for yield-seeking investors.

This specialty insurance company is expected to post quarterly earnings of $1.15 per share in its upcoming report, which represents a year-over-year change of -22.8%. Revenues are expected to be $354.98 million, up 17.8% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For RLI Corp., the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on RLI going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

RLI Corp. is part of the Zacks Insurance - Property and Casualty industry. CNA Financial (CNA - Free Report) , another stock in the same industry, closed the last trading session 0.7% higher at $38.51. CNA has returned -3.5% in the past month.

For CNA Financial, the consensus EPS estimate for the upcoming report has changed -0.3% over the past month to $1.16. This represents a change of +28.9% from what the company reported a year ago. CNA Financial currently has a Zacks Rank of #3 (Hold).

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