XL Group Upped to Buy on Business Expansion Initiatives

On Sep 24, Zacks Investment Research upgraded XL Group plc (XL ) to a Zacks Rank #2 (Buy).

Why the Upgrade?

XL Group has been witnessing rising earnings estimates on optimism following its endeavors to expand business. Over the past couple of months, XL Group has shown a lot of promise through its expansion strategies, be it in the business team through the addition of veterans or through the launch of units and policies.

Earlier in the month, the company launched an insurance policy to consolidate its cyber insurance portfolio. This policy will provide enhanced coverage to businesses to safeguard these from financial losses as well loss of goodwill owing to cyber and technology risks.

The company also strengthened its Excess and Surplus lines underwriting talent in Scottsdale, AZ. The beefed up lines will help it to increase its profitability from the region.

The company has also been successfully appeasing its investors with a favorable earnings performance. It posted a positive earnings surprise in three out of the past four quarters with an average surprise of 15%. In the most recently reported quarter, the company posted a beat on both top and bottom lines.

The recent positive developments also led to a rise in the Zacks Consensus Estimate for 2014 and 2015 in the last 60 days. It increased about 9.4% to $3.27 for 2014 as 8 of 9 estimates moved north. The Zacks Consensus Estimate for 2015 is up 4.4% to $3.30 per share over the same time frame as 4 of 9 analysts upped their estimates. The expected long-term growth rate for the stock is 2.3%.

Other Stocks to Consider

Investors interested in the property and casualty industry may also consider, AmTrust Financial Services, Inc. (AFSI), Mercury General Corporation (MCY) and Endurance Specialty Holdings Ltd. (ENH). All these stocks sport a Zacks Rank #1 (Strong Buy).