The Zacks Analyst Blog Highlights: Hanover Insurance Group, Baker Hughes, Tesco, Patterson-UTI Energy and Pioneer Energy Services

CHICAGO, Oct. 10, 2013 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the Hanover Insurance Group Inc. (NYSE: THG-Free Report), Baker Hughes Inc. (NYSE: BHI-Free Report), Tesco Corp. (Nasdaq: TESO-Free Report), Patterson-UTI Energy Inc. (Nasdaq: PTEN-Free Report) and Pioneer Energy Services Corp. (NYSE: PES-Free Report).

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Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Wednesday's Analyst Blog:

Hanover Insurance a Strong Buy

On Oct 8, Zacks Investment Research upgraded Hanover Insurance Group Inc. (NYSE: THG-Free Report) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Hanover has been experiencing rising earnings estimates on the back of improved market trends following its robust second-quarter 2013 results. Moreover, strong capitalization and reduced pricing pressure are deemed impressive.

Additionally, this leading property-casualty insurer delivered positive earnings surprises in the last 4 quarters with an average beat of 24.1%. Hanover also outperformed the year-to-date S&P index, which posted an increase of 18.0% against the robust return of 43.5% clocked by the company.

On Jul 31, Hanover reported second-quarter 2013 operating earnings per share of $1.05, which outpaced both the Zacks Consensus Estimate of 69 cents and the year-ago quarter number of 22 cents.

While year-over-year growth of 3.9% in earned premiums boosted the top line, lower-than-expected loss and loss adjusted expenses boosted the margins, bottom line and combined ratio. Although net investment income decreased marginally over the prior-year quarter, an improved book value per share and return on equity (ROE) reflected a healthy capital position.

Hanover consistently focuses on a diversified product portfolio and strong agency distribution strategy, which enables it to navigate through the current market volatility and tap healthy market opportunities. Alongside, prudent expense and risk management as well as effective capital deployment scores well with the investors.

Based on Hanover's fundamental strength and capital management, the Zacks Consensus Estimate for 2013 rose 5.5% to $4.42 per share in the last 60 days. Moreover, the Most Accurate Estimate for Hanover's 2013 earnings stands at $4.54 a share, resulting in a positive Earnings ESP of 2.7%.

Baker-Hughes Counts 15 More Rigs in September

In its monthly release, oilfield services provider, Baker Hughes Inc.'s (NYSE: BHI-Free Report) worldwide Rotary Rig Count for Sep 2013 was 3,431, up 15 from 3,416 in Aug 2013.

The Baker Hughes Rotary Rig Counts give the number of drilling rigs actively exploring for or developing oil or natural gas in the U.S., Canada and international markets. The Baker Hughes' rotary rig counts, issued since 1944, acts as an important yardstick for drilling contractors like Tesco Corp. (Nasdaq: TESO-Free Report), Patterson-UTI Energy Inc. (Nasdaq: PTEN-Free Report) and Pioneer Energy Services Corp. (NYSE: PES-Free Report) in gauging the overall business environment of the oil and gas industry. Baker Hughes initiated the monthly international rig count in 1975.    

Analysis of Monthly Data

International: Internationally, rigs engaged in exploration and production totaled 1,284 in Sep 2013. This was up 17 from 1,267 counted in Aug 2013, and up 30 from 1,254 counted in Sep 2012. The international offshore rig count for Sept 2013 was 313, up 4 from the 309 counted in Aug 2013, and up 20 from the 293 counted in Sept 2012.  

North America: North American rigs engaged in exploration and production totaled 2,147 in Sep 2013. This was down 2 from 2,149 counted in Aug 2013, and down 67 from 2,214 counted in Sep 2012. Rigs engaged in land operations fell by 7 to 2,077 from 2,084 in Aug 2013 and decreased by 85 from 2,162 in Sep 2012. The North American offshore rig count for Sep 2013 was 70, up by 5 from 65 counted in Aug 2013 and up 18 from 52 counted in Sep 2012.

The average U.S. rig count for Sept 2013 was 1,760, down 21 from 1,781 counted in Aug 2013, and down 99 from 1,859 counted in Sep 2012. The average Canadian rig count for Sep 2013 was 387, up 19 from 368 counted in Aug 2013, and up 32 from 355 counted in Sep 2012.

Zacks Rank

As of now, Pioneer Energy Services and Tesco hold Zacks Rank #1 (Strong Buy) and Zacks Rank #2 (Buy), respectively, implying that these are expected to perform above the broader U.S. equity market over the next one to three months. On the other hand, both Baker Hughes and Patterson-UTI Energy currently hold a Zacks Rank #3 (Hold) stocks, implying that these are expected to perform in line with the broader U.S. equity market over the same time frame.

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

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SOURCE Zacks Investment Research, Inc.


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