On Nov 25, Zacks Investment Research upgraded Alleghany Corp. (Y) by a notch to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Alleghany has witnessed positive earnings estimate revisions based on its compelling long-term growth story. Acquisitions made over the last couple of months and enhanced underwriting experience are boosting fundamentals. Additionally, a heathy cash and capital position adds more clarity to the company’s growth prospects.
An improved growth trend in 2014 is also evident from the earnings performance, wherein Alleghany delivered strong earnings surprises in three straight quarters, with an average beat of 41.3%.
An upward momentum in estimates further raises optimism. The Zacks Consensus Estimate for 2014 jumped 8% to earnings of $32.18 per share in the last 60 days, 8.1% higher than its 2013 equivalent. Likewise, the estimate for 2015 remained unchanged at $28.35 a share in the same period. Meanwhile, no downward revision in estimates was witnessed for both the years.
Alleghany Hits Another 52-Week High
Shares of Alleghany scaled a new 52-week high of $461.99 on Nov 25, breaching the last week’s high of $460.22 attained on Nov 18. The stock has escalated 15.8% since the beginning of 2014. While about 93.9K shares exchanged hands in the latest trading session, the average volume of shares traded over the last three months stands at approximately 48.28K.
Yesterday’s closing price represents a modest year-to-date return of 14%, almost on par with that clocked by the S&P 500 index. A steady growth outlook should continue to score well with ratings agencies and maintain a positive sentiment among shareholders.
Other Promising Picks
Investors interested in the insurance sector may also consider players like AmTrust Financial Services Inc. (AFSI), Arch Capital Group Ltd. (ACGL) and Navigators Group Inc. (NAVG). All these stocks sport the same Zacks Rank as Alleghany.
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