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Why Should You Add ProAssurance (PRA) to Your Portfolio?
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ProAssurance Corporation (PRA - Free Report) has been in investors’ good books on the back of its healthy premium income and a solid capital position. The company boasts a decent surprise history, having managed to surpass estimates in two of the trailing four quarters while missing in the other two, the average beat being 16.4%.
Now let’s see what factors are driving the stock.
ProAssurance’s core business has been witnessing a substantial improvement over the last few quarters. Further, the company is steadily benefiting from a rise in premiums, riding on its strategic buyouts. It is also moving toward its joint marketing and shared risk programs. The overall uptrend is evident from the stock’s 2015-2019 CAGR of 5.1%, which can be attributed to its prudent acquisitions, segmental contributions and strength in the new physician business.
A series of integrations helped the company add capabilities to its portfolio and improve its financial footing. The acquisitions of American Physicians Service Group, Medmarc, Eastern Insurance Holdings, et al significantly fortified its position in the workers’ compensation market. In February 2020, the company inked a deal to buy NORCAL, which is expected to increase ProAssurance’s concentration on Medical Professional Liability Insurance, making the combined entity the nation's third-largest specialty writer of liability insurance for healthcare professionals and facilities.
Investor confidence should also be retained, banking on the company’s solid capital position. Moreover, it has been enjoying substantial cash flow from operating activities over the last few quarters on the back of its strong balance sheet. Also, debt level has reduced over the past couple of years. Further, the company’s leverage ratio (total debt to equity) stands at 20.4%, lower than its industry average of 24.3%.
However, ProAssurance has been persistently facing an elevated expense level. The rising operating expenses could weigh on the bottom line moving ahead.
The Zacks Consensus Estimate for the company’s current-year earnings is pegged at 30 cents, suggesting a 137% rise from the year-ago reported figure.
The performance looks paler to other companies’ stock movement in the same space, such as RLI Corp. (RLI - Free Report) , The Allstate Corporation (ALL - Free Report) and The Progressive Corporation (PGR - Free Report) , which have gained 11.2%, 8.1% and 10.6%, respectively, in the same time frame. Nevertheless, the stock’s solid fundamentals will likely help it bounce back going forward.
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Why Should You Add ProAssurance (PRA) to Your Portfolio?
ProAssurance Corporation (PRA - Free Report) has been in investors’ good books on the back of its healthy premium income and a solid capital position.
The company boasts a decent surprise history, having managed to surpass estimates in two of the trailing four quarters while missing in the other two, the average beat being 16.4%.
Now let’s see what factors are driving the stock.
ProAssurance’s core business has been witnessing a substantial improvement over the last few quarters. Further, the company is steadily benefiting from a rise in premiums, riding on its strategic buyouts. It is also moving toward its joint marketing and shared risk programs. The overall uptrend is evident from the stock’s 2015-2019 CAGR of 5.1%, which can be attributed to its prudent acquisitions, segmental contributions and strength in the new physician business.
A series of integrations helped the company add capabilities to its portfolio and improve its financial footing. The acquisitions of American Physicians Service Group, Medmarc, Eastern Insurance Holdings, et al significantly fortified its position in the workers’ compensation market. In February 2020, the company inked a deal to buy NORCAL, which is expected to increase ProAssurance’s concentration on Medical Professional Liability Insurance, making the combined entity the nation's third-largest specialty writer of liability insurance for healthcare professionals and facilities.
Investor confidence should also be retained, banking on the company’s solid capital position. Moreover, it has been enjoying substantial cash flow from operating activities over the last few quarters on the back of its strong balance sheet. Also, debt level has reduced over the past couple of years. Further, the company’s leverage ratio (total debt to equity) stands at 20.4%, lower than its industry average of 24.3%.
However, ProAssurance has been persistently facing an elevated expense level. The rising operating expenses could weigh on the bottom line moving ahead.
The Zacks Consensus Estimate for the company’s current-year earnings is pegged at 30 cents, suggesting a 137% rise from the year-ago reported figure.
Shares of this Zacks Rank #2 (Buy) company have lost 38.2% in a year's time, wider than its industry’s decline of 10.2%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The performance looks paler to other companies’ stock movement in the same space, such as RLI Corp. (RLI - Free Report) , The Allstate Corporation (ALL - Free Report) and The Progressive Corporation (PGR - Free Report) , which have gained 11.2%, 8.1% and 10.6%, respectively, in the same time frame. Nevertheless, the stock’s solid fundamentals will likely help it bounce back going forward.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>