Bull of the Day: Aspen (AHL) - Bull of the Day
November 08 2013 - 4:12AM
Zacks
With excellent
underwriting results and solid investment portfolio
returns, this P&C insurer and reinsurer has
been consistently delivering positive earnings surprises.
About the Company
Founded in 2002 and based
in Hamilton, Bermuda, Aspen Insurance Holdings (AHL) is a global
insurance and reinsurance company. It operates through wholly-owned
subsidiaries and offices in Bermuda, France, Germany, Ireland,
Singapore, Switzerland, the United Kingdom and the United
States.
The company is rated ‘A
(Strong)’ by S&P, ‘A (Excellent)’ by AM Best and ‘A2 (Good)’ by
Moody’s.
Solid Third Quarter Results
Aspen reported its Q3 results on October 30, 2013. Net operating
income for the quarter came in at $1.05 per share, handily beating
the Zacks Consensus Estimate of $0.80 per share by 31.2%. However,
the results fell short of the year-ago quarter number by 21.6%.
Insurance segment had an excellent performance with gross written
premiums of $362.1 million, up 21.1% from the third quarter of
2012.
During the quarter, the insurer grew diluted book value per share
by 4% to $40.43 and delivered an annualized operating return on
equity of 10.8%. The management continues to expect to achieve an
operating ROE of 10% in 2014.
Positive
Earnings Estimates Revisions
As a result of continued
solid performance, the Zacks Consensus Estimate for 2013 has
increased has increased to $3.38 per share, from $2.98 per share,
60 days ago.
Aspen has delivered positive earnings surprises in three out of
last four quarters of 2012—with an average quarterly surprise of
28.5%.
Returning Cash to Shareholders
During the third quarter Aspen repurchased $55 million of its
shares bringing the year-to-date total share repurchases to $296
million. The company had $236.0 million remaining under its current
share repurchase authorization as of October 30, 2013.
The Bottom Line
AHL is a Zacks Rank#1 (Strong Buy) stock. It also has a longer-term
Zacks recommendation of “Outperform”. Further Zacks Industry rank
of 6 out of 265 greatly increases the likelihood of short-to-mid
term outperformance.
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