CHICAGO, April 18, 2013 /PRNewswire/ -- Zacks Equity Research highlights Tower International, Inc. (NYSE:TOWR) as the Bull of the Day and UTi Worldwide Inc. (Nasdaq:UTIW) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Markel Corp. (NYSE:MKL), Alterra Capital Holdings Ltd. (Nasdaq:ALTE) and Everest Re Ltd. (NYSE:RE).
Tower International, Inc. (NYSE:TOWR) recently delivered its 5th consecutive positive earnings surprise, which was driven by better-than-expected revenue. Management also provided bullish guidance for 2013, prompting analysts to revise their estimates meaningfully higher.
This sent the stock to a Zacks Rank #1 (Strong Buy).
In addition to strong earnings momentum, shares look cheap at just 9.1x forward earnings and 2.0x book value, both well below the industry medians.
Tower International is a global automotive supplier that provides a broad range of metal structures from stampings to complex body and frame assemblies for virtually every major automotive vehicle manufacturer.
With global auto sales expected to reach a record 83 million units in 2013, suppliers like Tower International have excellent growth potential.
Tower International reported better-than-expected fourth quarter results on February 15. Earnings per share came in at $0.05, beating the Zacks Consensus Estimate calling for a loss of -$0.06.
UTi Worldwide Inc. (Nasdaq:UTIW) recently reported a big earnings miss for its fiscal 2013 fourth quarter. It was the company's fourth straight earnings miss.
Consensus estimates have fallen significantly since the latest negative surprise, sending the stock to a Zacks Rank #5 (Strong Sell).
The valuation picture doesn't look much brighter either. Shares trade at a premium to the industry on both a price/earnings and price/cash flow basis.
UTi Worldwide Inc. provides supply chain services and solutions around the globe.
On March 28, UTi Worldwide reported disappointing fourth quarter results for its fiscal 2013. Earnings per share came in at -$0.13, missing the Zacks Consensus Estimate of +$0.14 by a wide margin. It was also a significant decline from +$0.15 in the same quarter last year.
Zacks Investment Research upgraded Markel Corp. (NYSE:MKL) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Markel has been experiencing rising earnings estimates on the back of improved fourth-quarter 2012 results. Moreover, the company's strong underwriting capabilities as well as improved debt levels and coverage ratios have been impressive. Additionally, this property-casualty insurer delivered positive earnings surprises in all of the last 4 quarters with an average beat of 113.3%.
On Feb 4, Markel reported fourth-quarter 2012 operating earnings of $5.78 per share, which exceeded the Zacks Consensus Estimate of a loss of $2.70 and earnings of $5.19 per share in the year-ago quarter.
Results were supported by 17.9% growth in operating revenue, driven by higher premiums and net investment income. Although operating expenses were higher than expected, tax expense declined significantly and combined ratio improved to 97% from 102% in the year-ago quarter. Even book value per share increased 15% at 2012-end.
Markel's strategy of growth through acquisitions has been scoring well with the ratings agencies. The latest acquisition of Alterra Capital Holdings Ltd. (Nasdaq:ALTE), scheduled to culminate by mid-2013, is further projected to improve Markel's debt to capital ratio by 100 basis points (bps) to 27%. Additionally, the acquisition is expected to improve the debt to equity ratio by 400 bps to 34% over the same time period. The creditworthiness of the company also helps retain investors' confidence in the stock.
Based on Markel's fundamental strength and claims management, the Zacks Consensus Estimate for 2013 rose 1.9% to $19.08 per share in the last 60 days. The estimate for 2014 is pegged at $22.45, up 4.9% in the last 60 days. Meanwhile, no downward revision in estimates was witnessed for both the years.
Moreover, the Most Accurate Estimate for Markel's 2013 earnings stands at $19.50 a share, resulting in a positive Earnings ESP (Read: Zacks Earnings ESP: A Better Method) of +2.2%.
Other Stocks to Consider
Apart from Markel, other stocks that are outperforming in the insurance sector include Everest Re Ltd. (NYSE:RE), which carries a Zacks Rank #1 (Strong Buy).
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
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