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.
Selective Insurance Hits 52-Week High: Will the Trend Remain?
Read MoreHide Full Article
Shares of Selective Insurance Group, Inc. (SIGI - Free Report) hit a new 52-week high of $63.80 on Aug 17, gaining traction from strong second-quarter 2018 earnings. With about 0.1 million shares having exchanged hands in the last trading session, the stock finally closed at $63.55, inching up 0.2%. The company’s return on equity has been an impressive 14.3%, comparing favorably with the industry average of 7.8% and also lying above the company’s 2018 guidance of 12%.
Stellar Q2 Results
Hanover Insurance Group’s record bottom line of $1.01 outpaced the Zacks Consensus Estimate by 12.2% and also improved nearly 49% year over year on solid results at Standard Commercial Lines and Personal Lines segments.
Net premium written grew 7% on solid renewal pure price. Net investment income gained 24.1% to higher interest rates, lower tax rate as well as active portfolio management and security selection. Total revenues thus rose 6.1% year over year.
Combined ratio improved 100 basis points (bps) on a year-over-year basis to 93.7%.
Shares of the company have gained 7.4% since it posted strong second-quarter results, outperforming the industry’s increase of 3.7%. This Zacks Rank #2 (Buy) property and casualty insurer flaunts a solid surprise history, beating estimates for four straight quarters with an average beat of 6.57%.
Why Should the Stock Continue the Bull Run?
Riding high on solid earnings results, the insurer continues to target a combined ratio (excluding catastrophe loss) of about 92% in 2018. Also, the company projects an after-tax investment income of $150 million, which will include $8 million of after-tax net investment income from alternative investments.
The insurer remains focused on geographic expansion for growth and diversification. As part of its long-term growth strategy, Selective Insurance intends to increase the standard commercial lines market held by its Ivy League distribution partners to at least 25% as well as grow the business shares to 12% within these distribution partners, which the company refers to as its "share of wallet".
Substantial new business opportunities, high retention ratio as well as pure renewal price increases should help improve the premiums.
The company has also taken a shield of reinsurance agreements to limit cat loss. With renewal of reinsurance agreement, net loss from large individual property and casualty claim loss is capped at $2 million. This in turn, will help the company lower volatility in its underwriting results.
The Zacks Consensus Estimate for 2018 reflects a 13.5% increase on 7.5% higher revenues. The consensus mark for revenues and earnings per share in 2019 translates into a year-over-year rise of 18.4% on 6.5. Over the past 30 days, the consensus estimate has been moved 3.5% north for 2018 and 0.7% up for 2019.
Selective Insurance has a favorable Growth Score of B. Growth Score analyzes the company’s growth prospects and also evaluates its corporate financial statements. Studies have shown that stocks exhibiting the best growth characteristics consistently outperform the market.
Arch Capital provides property, casualty and mortgage insurance and reinsurance products worldwide. It delivered a 13.46% positive surprise in the earlier reported quarter.
American Financial provides property and casualty insurance products in the United States. Last reported quarter, it pulled off an 8.51% positive earnings surprise.
Berkshire Hathaway engages in insurance, freight rail transportation and utility businesses. It came up with a blockbuster 22.91% beat in the previously reported quarter.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
Selective Insurance Hits 52-Week High: Will the Trend Remain?
Shares of Selective Insurance Group, Inc. (SIGI - Free Report) hit a new 52-week high of $63.80 on Aug 17, gaining traction from strong second-quarter 2018 earnings. With about 0.1 million shares having exchanged hands in the last trading session, the stock finally closed at $63.55, inching up 0.2%. The company’s return on equity has been an impressive 14.3%, comparing favorably with the industry average of 7.8% and also lying above the company’s 2018 guidance of 12%.
Stellar Q2 Results
Hanover Insurance Group’s record bottom line of $1.01 outpaced the Zacks Consensus Estimate by 12.2% and also improved nearly 49% year over year on solid results at Standard Commercial Lines and Personal Lines segments.
Net premium written grew 7% on solid renewal pure price. Net investment income gained 24.1% to higher interest rates, lower tax rate as well as active portfolio management and security selection. Total revenues thus rose 6.1% year over year.
Combined ratio improved 100 basis points (bps) on a year-over-year basis to 93.7%.
Shares of the company have gained 7.4% since it posted strong second-quarter results, outperforming the industry’s increase of 3.7%. This Zacks Rank #2 (Buy) property and casualty insurer flaunts a solid surprise history, beating estimates for four straight quarters with an average beat of 6.57%.
Why Should the Stock Continue the Bull Run?
Riding high on solid earnings results, the insurer continues to target a combined ratio (excluding catastrophe loss) of about 92% in 2018. Also, the company projects an after-tax investment income of $150 million, which will include $8 million of after-tax net investment income from alternative investments.
The insurer remains focused on geographic expansion for growth and diversification. As part of its long-term growth strategy, Selective Insurance intends to increase the standard commercial lines market held by its Ivy League distribution partners to at least 25% as well as grow the business shares to 12% within these distribution partners, which the company refers to as its "share of wallet".
Substantial new business opportunities, high retention ratio as well as pure renewal price increases should help improve the premiums.
The company has also taken a shield of reinsurance agreements to limit cat loss. With renewal of reinsurance agreement, net loss from large individual property and casualty claim loss is capped at $2 million. This in turn, will help the company lower volatility in its underwriting results.
The Zacks Consensus Estimate for 2018 reflects a 13.5% increase on 7.5% higher revenues. The consensus mark for revenues and earnings per share in 2019 translates into a year-over-year rise of 18.4% on 6.5. Over the past 30 days, the consensus estimate has been moved 3.5% north for 2018 and 0.7% up for 2019.
Selective Insurance has a favorable Growth Score of B. Growth Score analyzes the company’s growth prospects and also evaluates its corporate financial statements. Studies have shown that stocks exhibiting the best growth characteristics consistently outperform the market.
Other Stocks to Consider
Investors interested in property and casualty industry can also check out other top-ranked stocks like Arch Capital Group Ltd. (ACGL - Free Report) , American Financial Group, Inc. (AFG - Free Report) and Berkshire Hathaway Inc. (BRK.B - Free Report) , each sharing the same bullish Zacks Rank of 2 with Selective Insurance. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Arch Capital provides property, casualty and mortgage insurance and reinsurance products worldwide. It delivered a 13.46% positive surprise in the earlier reported quarter.
American Financial provides property and casualty insurance products in the United States. Last reported quarter, it pulled off an 8.51% positive earnings surprise.
Berkshire Hathaway engages in insurance, freight rail transportation and utility businesses. It came up with a blockbuster 22.91% beat in the previously reported quarter.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>