W.R. Berkley Hits 52-Week High on Strong Q3 Performance

On Oct 31, 2014, property and casualty insurer W. R. Berkley Corp. (WRB) surged to a 52-week high of $51.63. The rally in the stock was propelled by strong third-quarter earnings. The average trading volume for the session was nearly 0.97 million shares.

Year to date, the stock is up 21.2%, more than double than the S&P 500 increase of 10.2% over the same time frame.

Growth Drivers

W.R. Berkley Corp. came up with another encouraging quarterly performance beating on both the top and the bottom lines. Investors are pleased with the company’s fifth consecutive earnings beat.

The company’s core operating earnings of $1.06 per share beat the Zacks Consensus Estimate by a substantial 16.5%. Earnings also surged 37.7% year over year led by growth in premiums written, investment income and capital gains.

Revenues came in at $1.80 billion, up 12.6% year over year and significantly above the Zacks Consensus Estimate of $1.60 billion.

Investors’ optimism on the stock mostly stems from W.R. Berkley Corp.’s four consecutive quarters of positive surprise, with an average beat of 15.1%.

W.R. Berkley Corp.’s intelligent use of capital via share buyback and increase in dividend also make it a favored stock. The company hiked its annual dividend by 10% in May 2014.

Moreover, W.R. Berkley Corp.'s return on equity, which reveals its profitability, improved to 17.4% from 12.7% in the year-ago quarter.

Book value per share, a measure of net worth, improved 13.1% from the year end to $37.10 as of Sep 30, 2014.

Estimates Revision Show Strength

Driven by optimism surrounding the stock, over the last 30 days, the Zacks Consensus Estimate for 2014 earnings per share climbed 3.3% to $3.74.

W.R. Berkley Corp. carries a Zacks Rank #2 (Buy).

Other Stocks to Consider

Other players worth considering include Alleghany Corp. (Y), AmTrust Financial Services, Inc. (AFSI) and Endurance Specialty Holdings Ltd. (ENH). All these stocks carry a Zacks Rank #1 (Strong Buy).