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Why Is AMERISAFE (AMSF) Down 6% Since the Last Earnings Report?
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It has been about a month since the last earnings report for AMERISAFE, Inc. (AMSF - Free Report) . Shares have lost about 6% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
AMERISAFE Q4 Earnings Meet, Revenues Miss Estimates
AMERISAFE reported fourth-quarter 2016 operating earnings per share of $1.04, in line with the Zacks Consensus Estimate. The bottom line deteriorated 13.3% year over year due to lower revenues, which in turn, were hurt by a decline in premiums written.
Quarter in Detail
AMERISAFE’s total operating revenue decreased 3.1% year over year to $98.6 million. The top line also came in below the Zacks Consensus Estimate of $100 million. The decline stemmed from a 3.1% year-over-year deterioration in net premiums earned to $92 million. Also, lower fee and other income led to the revenue decline.
The company’s insurance segment reported 9.1% decline in gross premiums written to $80.6 million. Net premiums earned dipped 3.1% year over year to $92.1 million.
Net investment income, which accounted for almost 8% of the total revenue, increased 8.3% year over year to $7.9 million. The improvement was largely due to the increase in the value of an investment in a limited partnership hedge fund.
Insurance loss adjustment expenses increased 8.9% year over year to $52.6 million. Total expense of $70.8 million increased 4.1% year over year.
Underwriting profit plunged 21.1% year over year to $21.3 million. Also, net combined ratio deteriorated 530 basis points to 76.8% due to higher net loss ratio, partly offset by a decline in expense ratio.
Financial Update
Amerisafe exited the quarter with cash and investments worth $58.94 million, down 15.2% year over year. As of Dec 31, 2016, total shareholders’ equity
was $456.2 million compared with $454 million at the end of 2015. Operating return on equity was 16.7% in the quarter as against 19.7% in the year-ago quarter. Book value per share remained unchanged on a year-over-year basis at $23.72.
Dividend and Share Repurchase Update
During the quarter, no shares were bought back under the repurchase plan. A day before the earnings release, the company increased its quarterly dividend by 11.1% to $0.18 per share. This increased dividend will be paid on Mar 24, to the shareholders on record as of Mar 10, 2017.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
At this time, AMERISAFE's stock has a poor Growth Score of 'F', however its Momentum is doing a lot better with an 'A'. However, the stock was allocated a grade of 'C' on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the stock is more suitable for momentum investors than value investors.
Outlook
The stock has a Zacks Rank #4 (Sell). We are expecting an below average return from the stock in the next few months.
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Why Is AMERISAFE (AMSF) Down 6% Since the Last Earnings Report?
It has been about a month since the last earnings report for AMERISAFE, Inc. (AMSF - Free Report) . Shares have lost about 6% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock’s next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
AMERISAFE Q4 Earnings Meet, Revenues Miss Estimates
AMERISAFE reported fourth-quarter 2016 operating earnings per share of $1.04, in line with the Zacks Consensus Estimate. The bottom line deteriorated 13.3% year over year due to lower revenues, which in turn, were hurt by a decline in premiums written.
Quarter in Detail
AMERISAFE’s total operating revenue decreased 3.1% year over year to $98.6 million. The top line also came in below the Zacks Consensus Estimate of $100 million. The decline stemmed from a 3.1% year-over-year deterioration in net premiums earned to $92 million. Also, lower fee and other income led to the revenue decline.
The company’s insurance segment reported 9.1% decline in gross premiums written to $80.6 million. Net premiums earned dipped 3.1% year over year to $92.1 million.
Net investment income, which accounted for almost 8% of the total revenue, increased 8.3% year over year to $7.9 million. The improvement was largely due to the increase in the value of an investment in a limited partnership hedge fund.
Insurance loss adjustment expenses increased 8.9% year over year to $52.6 million. Total expense of $70.8 million increased 4.1% year over year.
Underwriting profit plunged 21.1% year over year to $21.3 million. Also, net combined ratio deteriorated 530 basis points to 76.8% due to higher net loss ratio, partly offset by a decline in expense ratio.
Financial Update
Amerisafe exited the quarter with cash and investments worth $58.94 million, down 15.2% year over year. As of Dec 31, 2016, total shareholders’ equity
was $456.2 million compared with $454 million at the end of 2015.
Operating return on equity was 16.7% in the quarter as against 19.7% in the year-ago quarter. Book value per share remained unchanged on a year-over-year basis at $23.72.
Dividend and Share Repurchase Update
During the quarter, no shares were bought back under the repurchase plan. A day before the earnings release, the company increased its quarterly dividend by 11.1% to $0.18 per share. This increased dividend will be paid on Mar 24, to the shareholders on record as of Mar 10, 2017.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
AMERISAFE, Inc. Price and Consensus
AMERISAFE, Inc. Price and Consensus | AMERISAFE, Inc. Quote
VGM Scores
At this time, AMERISAFE's stock has a poor Growth Score of 'F', however its Momentum is doing a lot better with an 'A'. However, the stock was allocated a grade of 'C' on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the stock is more suitable for momentum investors than value investors.
Outlook
The stock has a Zacks Rank #4 (Sell). We are expecting an below average return from the stock in the next few months.