On Nov 29, Zacks Investment Research upgraded Fortegra Financial Corporation (FRF) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Fortegra Financial has been witnessing rising earnings estimates on the back of strong third-quarter 2014 results. Moreover, this multiline insurer delivered positive earnings surprises in three of the last four quarters with an average beat of 6.2%.
Riding on the strength of higher organic revenues in payment protection products and lower claim costs, Fortegra Financial’s third quarter earnings surpassed the Zacks Consensus Estimate and also improved year over year. Revenues also improved year over year and was in line with the Zacks Consensus Estimate.
Both direct and assumed written premiums and adjusted earnings before interest, tax, depreciation and amortization (EBITDA) improved year over year.
The company also entered into an Agreement and Plan of Merger, pursuant to which the subsidiaries of Tiptree Financial Inc. (TIPT) will acquire Fortegra Financial for $218 million in cash during the quarter.
Furthermore, Fortegra Financial has been successfully strengthening its balance sheet. Its cash balance increased while leverage ratios witnessed improvement in the reported quarter.
Additionally, the company outperformed the year-to-date S&P 500 index, which recorded growth of 14.2% against a return of 28.2% delivered by the company. It is also benefiting from controlled expenses due to lower member benefit claims as well as lower commissions.
Fortegra Financial’s strong performance prompted upward revisions in the Zacks Consensus Estimate, which rose 4.1% to 77 cents for 2014 over the last 30 days.
Other Stocks to Consider
Investors interested in the same sector could also consider CNO Financial Group, Inc. (CNO) and American International Group, Inc. (AIG). While CNO Financial sport the same Zacks Rank as Fortegra Financial, American International hold Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment