Aspen Insurance Upped to Strong Buy - Analyst Blog

On Mar 26, Zacks Investment Research upgraded Aspen Insurance Holdings Ltd. AHL to a Zacks Rank #1 (Strong Buy) owing to its rising earnings estimates following solid fourth-quarter 2013 results.

Why the Upgrade?

Aspen Insurance has been witnessing an upward trend in earnings estimate revisions ever since it reported its fourth-quarter 2013 results on Feb 6. The Zacks Consensus Estimate for 2014 has gone up 1.1% to $3.56 per share in the past two-months time frame. Likewise, the Zacks Consensus Estimate for 2015 also rose 0.8% over the same time-frame and is currently pegged at $3.85 per share.

Fourth-quarter results at Aspen Insurance clocked a positive earnings surprise of 0.9%. With this, the company delivered positive surprises in three of its last four quarters with an average beat of 6.8%. Since the earnings release, shares of this property and casualty insurer has spiked nearly 4.9% to close at $39.30 on March 25.

Aspen Insurance reported fourth-quarter operating net income of $1.13 per share, which beat the Zacks Consensus Estimate of $1.12 by a penny. The number, however, surged significantly from the prior-year quarter's operating net loss of 15 cents a share.

The bottom-line surge was driven by strong growth in net premiums earned at the Insurance segment, which in turn, was owing to the company's successful development of its U.S. platform which remained profitable in all the quarters of 2013.

Aspen Insurance is witnessing operating synergies on the back of strong capital management, enhanced investment returns and optimization of the business portfolio. Moreover, the Insurance segment at Aspen Insurance is well positioned to drive meaningful operating leverage further.

Other Stocks to Consider

Some other top-ranked stocks worth mentioning in the property and casualty insurance industry are Alleghany Corp. Y, AmTrust Financial Services, Inc. AFSI and Fidelity National Financial, Inc. FNF. All these stocks carry the same Zacks Rank as Aspen Insurance.