CNinsure Crafts a 52-Week High - Analyst Blog

On Mar 12, 2014, shares of CNinsure Inc. CISG reached a new 52-week high of $9.42, shortly after the company reported solid fourth-quarter 2013 results. In fact, the share price has escalated almost 19% since the company reported its fourth quarter results on Mar 10.  

Its fourth-quarter operating earnings of 8 cents per share improved 24% year over year. The improvement was driven by the company's strong performance at the property and casualty insurance and claims adjusting businesses, and effective expense management.

In terms of revenues, CNinsure delivered a 15.6% year-over-year improvement. Growth in net revenues across the P&C insurance (fueled by higher sales volume and commission rates received from insurance writers) and claims adjusting business segments mainly led to the upside. For 2014, the company expects revenues to increase further by 15%.

The company has also strengthened its operations through an expansion in its distribution and service network. At the end of 2013, CNinsure's sales and services outlets increased by nearly 2% year over year to 480, while the number of sales agent and representatives, and claims adjustors grew almost 10% and 6%, respectively.

CNinsure also boasts a strong cash position with an increase in cash and cash equivalents at end-2013 from 2012-end. This will help the company in enhancing shareholders' value through share repurchases and dividend payouts.

The stock gained almost 43% in the 1-year period. CNinsure's 1-year return of 52.06% was higher than that of the other industry players, with Brown & Brown Inc. BRO, Marsh and McLennan Companies, Inc. MMC and Arthur J Gallagher & Co. AJG recording 1.20%, 33.2% and 20.9% returns, respectively. The Zacks Consensus Estimate for 2014 is pegged at 45 cents per share, up 40.6% year over year while the same for 2015 stands at 65 cents per share, up 44.4% year over year.

CNinsure currently carries a Zacks Rank #4 (Sell). Marsh & McLennan is a better-ranked stock in the sector with a Zacks rank #2 (Buy) and is worth considering.