On Nov 28, 2014, shares of Montpelier Re Holdings Ltd. (MRH) scaled a 52-week high of $34.55 buoyed by a solid third-quarter earnings beat. With about 0.1 million shares exchanging hands in the last trading session, the stock closed at $34.05.
The year-to-date return from the stock came in at 17.01%, which was ahead of the S&P’s return of 11.85%. With respect to earnings performance, this property and casualty insurer has delivered positive surprises in the three of last four quarters, with an average beat of 28.83%.
In the third quarter of 2014, Montpelier posted earnings of 86 cents per share, surpassing the Zacks Consensus Estimate by 2.38%. The quarter got a solid contribution from Lloyd’s and Collateralized Re segments that improved net premiums by 13% in the quarter.
With respect to enhancing shareholders’ value, Montpelier has lowered its share count by buying back shares. Montpelier Re spent $70.3 million to buy back 1.8 million common shares in the third quarter. Following the quarter end, the company has already repurchased 0.9 million shares to date.
Montpelier exited the third quarter with cash and investments of $3.3 billion that improved 1.6% from the end of 2013. Book value per share also improved 1.7% year over year to $$32.27 as of Sep 30, 2014.
A solid quarterly performance has prompted the Zacks Consensus Estimate to increase 11% to $3.93 for 2014 as all five estimates were raised in the last 60 days. Montpelier presently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Better-ranked property and casualty insurers include AmTrust Financial Services, Inc. (AFSI), Arch Capital Group Ltd. (ACGL) and Navigators Group Inc. (NAVG). All the three stocks sport Zacks Rank #1 (Strong Buy).
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