On Nov 14, AXIS Capital Holdings Limited (AXS) reached a new 52-week high of $49.84 per share, driven by strong third-quarter 2014 results. With about 0.84 million shares exchanging hands in the last trading session, the stock closed at $49.82, gaining 0.36%.
With respect to earnings performance, this property and casualty insurer delivered positive surprises in two of last four quarters with an average beat of 6.37%. In the third quarter of 2014, AXIS Capital reported earnings per share of $1.27, surpassing the Zacks Consensus Estimate by 7%. Solid performance at the Reinsurance segment along with favorable reserve development and lower share count drove the upside. However, the results declined year over year by 27%.
AXIS Capital’s revenue rose 10% year over year due to higher net premiums, and other insurance-related income. Results surpassed the Zacks Consensus Estimate by a marginal amount.
Net premiums earned improved 2% to $966 million driven by better results at both Insurance and Reinsurance segments.
Total expense in the quarter decreased 5% year over year owing to lower foreign exchange losses.
As part of its efforts to improve shareholders value, AXIS Capital repurchased 3.2 million of its common shares for $150 million. As of Oct 29, the company had an authorization of $300 million remaining under its common share repurchase program that will expire on Dec 31, 2015.
AXIS Capital also reported annualized return on average common equity of 21.2%, an increase of 94.5%. This reflects the company’s solid year-over-year performance with a significant increase in net income to $279 million. Also, shareholder’s equity increased 0.2% to $5.9 billion in third-quarter 2014.
Rating affirmations or upgrades from credit rating agencies play an important part in retaining investor faith in the stock as well as in maintaining credit worthiness in the market. AXIS Capital scores strongly in that respect. In Sep 2014, A.M. Best Co. affirmed the issuer credit rating (ICR) of “aa-” and financial strength rating of A+ (Superior) with a stable outlook.
This Zacks Rank #3 (Hold) stock has been witnessing upward revisions in the Zacks Consensus Estimate over the last 30 days. For 2014, the Zacks Consensus Estimate moved north by 1.5% to $5.26 per share as 4 of 10 estimates moved up, while for 2015, it rose 0.6% to $4.69 as 3 of 10 estimates moved north.
Other Stocks to Consider
Better-ranked stocks in the same industry worth reckoning include AmTrust Financial Services, Inc. (AFSI), Arch Capital Group Ltd. (ACGL) and Atlas Financial Holdings, Inc. (AFH). All these stocks sport a Zacks Rank #1 (Strong Buy).
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