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.
Palomar Gains 47.4% YTD: Can the Stock Retain the Momentum?
Read MoreHide Full Article
Palomar Holdings, Inc. (PLMR - Free Report) shares have gained 47.4% year to date against the industry's decline of 18.8% and the Zacks S&P 500 composite’s decrease of 5.4%. With market capitalization of $1.8 billion, average volume of shares traded in the last three months was 0.4 million.
The company continues to benefit from sturdy new business, rate increases and strong premium retention. The company delivered positive surprise in two of the last four reported quarters with the average beat being 10.93%.
Return on equity was 19.7% in the first quarter of 2020 against negative 58.2% in the first quarter of 2019 and was better than the industry average of 6.5%, reflecting the company’s efficiency in utilizing shareholders’ fund.
Can it Retain the Momentum?
Premiums should continue to benefit from its solid product portfolio (short tail in nature) as well as geographic expansion, appointment of new producers, strategic partnerships with other insurance carriers and rate increases.
Recently, Palomar Holdings successfully completed reinsurance programs. Per the program, the company procured about $200 million of incremental limit for California earthquakes, $300 million of incremental limit for all earthquake zones, and $80 million of incremental windstorm limit. It also increased its catastrophe event retention to $10 million from $5 million for all perils. Reinsurance programs limit loss of the company, cushioning growth initiatives.
Further the company’s risk transfer strategy limits exposure to major events, thus lowering earnings volatility.
Its balance sheet remains solid given $35.5 million capital infusion from stock offering. The company also boasts a debt-free balance sheet with no exposure to the equity markets. Its investment portfolio consists of primarily highly liquid and high-quality fixed income securities. Palomar Holdings enjoys strong rating from credit rating agencies.
Based on operational excellence, Palomar Holdings estimates 2020 adjusted net income between $50.5 million and $53 million, indicating year-over-year growth of 33% to 40%.
The Zacks Consensus Estimate for 2020 and 2021 earnings indicates 20.8% and 18.3% respective year-over-year increase.
It currently carries a Zacks Rank #2 (Buy). The consensus estimate for 2020 has moved up 5% in the past 30 days.
Other Stocks to Consider
Some other top-ranked companies in the insurance industry are National General Holdings Corp , Heritage Insurance Holdings Inc. (HRTG - Free Report) and The Allstate Corporation (ALL - Free Report) .
National General, a specialty personal lines insurance holding company, provides various insurance products and services in the United States, Bermuda, Luxembourg and Sweden. Its earnings beat estimates in two of the last four quarters, the average positive surprise being 5.68%. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Heritage Insurance provides personal and commercial residential insurance products. The company surpassed estimates in each of the last four quarters, the average positive surprise being 61.34%. The stock carries a Zacks Rank #2.
Allstate provides property and casualty, and other insurance products in the United States and Canada. The company surpassed estimates in each of the last four quarters, the average positive surprise being 18.45%. The stock carries a Zacks Rank #2.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
This young company’s gigantic growth was hidden by low-volume trading, then cut short by the coronavirus. But its digital products stand out in a region where the internet economy has tripled since 2015 and looks to triple again by 2025.
Its stock price is already starting to resume its upward arc. The sky’s the limit! And the earlier you get in, the greater your potential gain.
Image: Bigstock
Palomar Gains 47.4% YTD: Can the Stock Retain the Momentum?
Palomar Holdings, Inc. (PLMR - Free Report) shares have gained 47.4% year to date against the industry's decline of 18.8% and the Zacks S&P 500 composite’s decrease of 5.4%. With market capitalization of $1.8 billion, average volume of shares traded in the last three months was 0.4 million.
The company continues to benefit from sturdy new business, rate increases and strong premium retention. The company delivered positive surprise in two of the last four reported quarters with the average beat being 10.93%.
Return on equity was 19.7% in the first quarter of 2020 against negative 58.2% in the first quarter of 2019 and was better than the industry average of 6.5%, reflecting the company’s efficiency in utilizing shareholders’ fund.
Can it Retain the Momentum?
Premiums should continue to benefit from its solid product portfolio (short tail in nature) as well as geographic expansion, appointment of new producers, strategic partnerships with other insurance carriers and rate increases.
Recently, Palomar Holdings successfully completed reinsurance programs. Per the program, the company procured about $200 million of incremental limit for California earthquakes, $300 million of incremental limit for all earthquake zones, and $80 million of incremental windstorm limit. It also increased its catastrophe event retention to $10 million from $5 million for all perils. Reinsurance programs limit loss of the company, cushioning growth initiatives.
Further the company’s risk transfer strategy limits exposure to major events, thus lowering earnings volatility.
Its balance sheet remains solid given $35.5 million capital infusion from stock offering. The company also boasts a debt-free balance sheet with no exposure to the equity markets. Its investment portfolio consists of primarily highly liquid and high-quality fixed income securities. Palomar Holdings enjoys strong rating from credit rating agencies.
Based on operational excellence, Palomar Holdings estimates 2020 adjusted net income between $50.5 million and $53 million, indicating year-over-year growth of 33% to 40%.
The Zacks Consensus Estimate for 2020 and 2021 earnings indicates 20.8% and 18.3% respective year-over-year increase.
It currently carries a Zacks Rank #2 (Buy). The consensus estimate for 2020 has moved up 5% in the past 30 days.
Other Stocks to Consider
Some other top-ranked companies in the insurance industry are National General Holdings Corp , Heritage Insurance Holdings Inc. (HRTG - Free Report) and The Allstate Corporation (ALL - Free Report) .
National General, a specialty personal lines insurance holding company, provides various insurance products and services in the United States, Bermuda, Luxembourg and Sweden. Its earnings beat estimates in two of the last four quarters, the average positive surprise being 5.68%. The stock sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Heritage Insurance provides personal and commercial residential insurance products. The company surpassed estimates in each of the last four quarters, the average positive surprise being 61.34%. The stock carries a Zacks Rank #2.
Allstate provides property and casualty, and other insurance products in the United States and Canada. The company surpassed estimates in each of the last four quarters, the average positive surprise being 18.45%. The stock carries a Zacks Rank #2.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
This young company’s gigantic growth was hidden by low-volume trading, then cut short by the coronavirus. But its digital products stand out in a region where the internet economy has tripled since 2015 and looks to triple again by 2025.
Its stock price is already starting to resume its upward arc. The sky’s the limit! And the earlier you get in, the greater your potential gain.
Click Here, See It Free >>