Comments and analysis on today’s earnings please. Would you buy/ add going forward in a diversified portfolio?
Thank you.
EPS of $0.69 missed estimates of $0.74 and revenues of $900.38M beat estimates of $878.73M. Its operating ROE was 17.8%, as it benefited from its specialty focus, disciplined underwriting and solid investment income. Gross written premiums declined 5.8% year-over-year, but its net insurance revenue grew 18.1%. Net income grew nicely at 36.8%, mostly as a result of its strong investment income. Management expects continued growth in primary lines and surety segments, and overall, these were decent results, though not quite enough to help the name break out of its multi-year range.
We continue to like TSU as a relatively high-growth name, with a defensive tilt, being in the insurance industry. But we would prefer to add or initiate a position once it has broken out above the $40 price range (into the $50s and above would signal potential price discovery).