Hallmark's Positive Earnings Streak Continues: Surprises in Five of Last Six Quarters
By Zacks.com Jan 23, 2013 10:45 am
This property and casualty insurer delivered an earnings surprise of more than 150% for its third quarter.
Hallmark Financial Services Inc. (NASDAQ:HALL) has posted positive earnings surprises in five of the last six quarters with an average beat of 76.1%. Most recently, this property and casualty insurer delivered an earnings surprise of more than 150% for its third quarter. Additionally, with a price-to-book (P/B) ratio of just 0.81, this Zacks Rank No. 1 (Strong Buy) stock appears to be a true value pick.On November 7, Hallmark Financial reported third-quarter earnings of $.18 per share, which surpassed the Zacks Consensus Estimate by a substantial 157% and also improved significantly from a penny earned last year. The upside was largely driven by an improved top-line along with lower loss and loss adjustment expenses, primarily attributable to better current accident year loss trends in the Personal Lines business.
Operating revenue was $84 million, which outpaced the Zacks Consensus Estimate by 7% and the year-ago number by 6.3%. The improvement stemmed from higher premiums, largely from the E&S Commercial business unit and from the acquisition of the Workers Compensation business.
Hallmark Financial expects to have mid single-digit to low double-digit rate increases across all operations. However, General Aviation might face stiff competition in a contracting market.
Additionally, management stated that the initiative to improve underwriting profitability, increase rates, and exit unprofitable zones and product lines in the Personal Segment has been executed fruitfully.
Hallmark Financial has not yet announced its fourth-quarter earnings release date. The Zacks Consensus Estimate for the quarter is $.11 on revenues of $87 million. The expected earnings represent a year-over-year improvement of 450%.
For 2013, the Zacks Consensus Estimate increased 5.1% to $.82 over the last 60 days, which would mark a year-over-year improvement as high as 266.7%.
Along with a very attractive P/B multiple, Hallmark Financial has a price-to-earnings (P/E) ratio of 11.1 (a P/B ratio under 3.0 and a P/E ratio below 15.0 generally indicate value).
Headquartered in Fort Worth, Texas, and founded in 1987, Hallmark Financial Group, through its subsidiaries, provides property and casualty insurance products to businesses and individuals in the United States. The company has a market cap of $176.8 million. Other Zacks Rank No. 1 stocks from the same industry include Cincinnati Financial Corp. (NASDAQ:CINF), Fidelity National Financial, Inc. (NYSE:FNF), and First American Financial Corporation (NYSE:FAF).
To read this article on Zacks.com, click here.
More from Zacks.com:
Four Excellent Divdend ETFs for Income and Stability
Earnings Season Looks Presentable
Google Ends the Year Well
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Everything you need to know for the next trading day.
Trading Radar (weekly)
Your road map to all the events that will effect financial markets in the week ahead.