Why Aspen Insurance (AHL) Is Surging This Morning

NEW YORK (TheStreet) -- Shares of Aspen Insurance Holdings Ltd. (AHL) are surging, up 17.88% to $46.51, after Endurance Specialty Holdings Ltd. (ENH) said it offered to acquire Aspen for about $3.2 billion in cash and stock, according to Reuters.

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TheStreet Ratings team rates ASPEN INSURANCE HOLDINGS LTD as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate ASPEN INSURANCE HOLDINGS LTD (AHL) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 12.8%. Since the same quarter one year prior, revenues slightly increased by 6.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • AHL's debt-to-equity ratio is very low at 0.18 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • ASPEN INSURANCE HOLDINGS LTD reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. However, we anticipate underperformance relative to this pattern in the coming year. During the past fiscal year, ASPEN INSURANCE HOLDINGS LTD increased its bottom line by earning $4.15 versus $3.38 in the prior year. For the next year, the market is expecting a contraction of 14.4% in earnings ($3.55 versus $4.15).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Insurance industry average, but is greater than that of the S&P 500. The net income increased by 4647.4% when compared to the same quarter one year prior, rising from $1.90 million to $90.20 million.
  • You can view the full analysis from the report here: AHL Ratings Report

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