On Apr 9, shares of AmTrust Financial Services, Inc. AFSI scaled a new 52-week high of $59.37 on its latest acquisitions and strong fourth-quarter 2014 earnings.
AmTrust’s one-year return of 60.1% was significantly higher than Dow Jones’ return of 9.4%. The return was also much above the other industry players like Markel Corp. MKL, Kemper Corp. KMPR and National Interstate Corp. NATL, which returned 28.9%, -0.5% and 6.3%, respectively.
Last month, AmTrust entered into an agreement to acquire ARI Mutual Insurance Company, post the conversion of ARI to a stock company from a mutual one. The deal is pending regulatory approval and is expected to close by the fall of 2015.
However, as a stepping stone toward the culmination of the transaction, AmTrust has entered into a quota-share reinsurance agreement with ARI. The news prompted enthusiastic reactions among investors as ARI's well-established commercial insurance products and distribution should support AmTrust’s strategy of enhancing shareholders’ value through accretive acquisitions.
In line with this strategy, the company acquired CorePointe Insurance Company in the first week of Mar 2015. This acquisition will lead to the diversification and distribution of its products.
AmTrust reported strong fourth-quarter earnings in the second week of Feb 2015 that surpassed the Zacks Consensus Estimate and also improved year over year on gain on life settlements. Financial position of the company also remained strong at the end of 2014. AmTrust performed well in the workers’ compensation market and expects to continue with its stellar performance in 2015, despite competitive pressures.
AmTrust currently carries a Zacks Rank #3 (Hold).
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