On Dec 24, 2014, shares of Enstar Group Limited (ESGR) scaled a 52-week high of $161.73 on the back of solid third-quarter earnings. With roughly 0.01 million shares traded in the last session, the stock finally closed at $154.00 per share, gaining 0.40% on the day.
The year-to-date return of Enstar Group is 10.8%, ahead of year-to-date return of other stocks in the insurance industry like AXIS Capital Holdings Limited (AXS), RenaissanceRe Holdings Ltd. (RNR) and Aspen Insurance Holdings Ltd. (AHL).
With respect to earnings performance, this multiline insurer delivered positive surprises in three of the last four quarters with an average beat of 15.6%. In the third quarter of 2014 Enstar Group reported adjusted net earnings of $1.99 per share, surpassing the Zacks Consensus Estimate by 99% and significantly improving year over year. The improvement came on the back of improved revenues.
The revenues improved 72.6% year over year due to the rise in net premiums earned, fees and commission income and net investment income.
Additionally, Enstar Group has been focusing on strengthening its balance sheet with cash and cash equivalents of $921.6 million (up 43% from 2013-end level), total assets worth $10.3 billion (up 18.9% from 2013-end level) and shareholder’s equity worth $2.4 billion (up 23.2% from 2013-end level). The company has reduced it loans payable by 29.2% to $320 million. The company also recorded net cash flows provided by the operating activities of $437.8 million compared to net cash flows used in the operating activities of $125.6 million a year ago.
Enstar Group has also been focusing on its inorganic growth. In Aug 2014, the company acquired Companion Property and Casualty Insurance Company from Blue Cross and Blue Shield of South Carolina for $218 million. Earlier this year, the company purchased Torus Insurance Holdings Limited – an A-rated global specialty insurer with six wholly-owned insurance vehicles.
Enstar Group currently holds Zacks Rank #2 (Buy).
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