Here is a synopsis of all five stocks:
Following the Q2 report, analysts revised their estimates significantly higher for both 2014 and 2015. This sent the stock to a Zacks Rank #1 (Strong Buy).
Intel is the world’s largest supplier of microprocessors with over 75% of worldwide market share among traditional PCs and servers.
Gross profit as a percentage of total revenue improved greatly. The gross margin rose from 58.3% to 64.5%. Meanwhile, marketing, general and administrative expenses declined 5% and fell from 16.9% to 14.9% of revenue.
These factors led to a whopping 41% surge in operating income as the operating margin expanded 21.2% to 27.8%.
Management also provided fiscal 2015 guidance well below consensus, prompting analysts to revise their estimates significantly lower for both 2015 and 2016. This sent the stock to a Zacks Rank #5 (Strong Sell).
The second-quarter earnings season has commenced with speculations rife over earnings beats and or misses in every sector. The mood is quite optimistic in the non-life insurance industry, or the Property and Casualty (P&C) insurance sector, in particular. Along with benign cat environment, effective risk management should have translated into better numbers for the quarter.
Though April and May saw lashing winds and severe hailstorms, the industry escaped material cat losses. Courtesy of a benign cat environment, insurers are likely to have witnessed improved combined ratios – a primary measure of underwriting profitability. Moreover, lesser claim payments should drive earnings and help insurers pump up their reserves.
Market hardening led to improved pricing in the second quarter. This is likely to translate into higher premiums and thus drive margin expansion.
However, a sustained soft interest rate environment is expected to weigh upon the investment results. Though investment results are not expected to come anywhere near their historical highs, a better reinvestment rate might bring some respite.
Nonetheless, insurers are expanding their global footprint thereby infusing more capital into the already well-capitalized industry.
Favorable conditions are helping insurers to impressively deploy capital, as evident from their continued share repurchase activities and dividend hikes.
Moreover, the Zacks Industry Rank for P&C insurance industry is #60, falling in the upper 1/3 tier of Zacks Industry Rank. This clearly points to a positive outlook.
Given this favorable industry trend, it will be a good idea to add a few P&C insurance stocks that are poised to beat estimates in their upcoming release. An earnings beat should immediately propel these stocks.
Earnings ESP is our proprietary methodology for determining stocks with the best chance to surprise with their next earnings announcement. It shows the percentage difference between the Most Accurate estimate and the Zacks Consensus Estimate.
The combination of a favorable Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) – and a positive Earnings ESP is usually an indication of an earnings beat. Our research shows that for stocks with this combination, the chance of a positive earnings surprise is as high as 70%.
An enriched product portfolio will help the company increase its premium writings. The company currently has a Zacks Rank #2 along with an Earning ESP of +6.01%. Everest Re posted an earnings beat of 12.17% on average in the last four quarters.
An improved property & casualty pricing environment is expected to drive higher premiums for this company. Its strategic acquisitions will also improve premium writings.
The company currently has a Zacks Rank #3 along with an Earning ESP of +0.89%. ACE Limited generated better-than-expected earnings in the last four quarters with an average beat of 14.5%. Solid underwriting performances aided the outperformance.
The company is expected to benefit from its service upgrade and global expansion.
The company currently has a Zacks Rank #3 along with an Earning ESP of +3.75%. Allied World posted an earnings beat of 45.63% on average in the last four quarters.
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SOURCE Zacks Investment Research, Inc.