3 Stocks Pushing The Insurance Industry Lower

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The Insurance industry as a whole closed the day down 0.4% versus the S&P 500, which was down 0.6%. Laggards within the Insurance industry included National Security Group ( NSEC), down 2.0%, Life Partners Holdings ( LPHI), down 2.0%, Crawford & Company ( CRD.B), down 2.3%, Tiptree Financial ( TIPT), down 8.5% and Global Indemnity ( GBLI), down 2.0%.

TheStreet Ratings Group would like to highlight 3 stocks that pushed the industry lower today:

HCI Group ( HCI) is one of the companies that pushed the Insurance industry lower today. HCI Group was down $0.69 (1.7%) to $40.24 on light volume. Throughout the day, 52,831 shares of HCI Group exchanged hands as compared to its average daily volume of 109,500 shares. The stock ranged in price between $40.10-$40.93 after having opened the day at $40.80 as compared to the previous trading day's close of $40.93.

HCI Group, Inc., through its subsidiaries, provides property and casualty insurance products in Florida. HCI Group has a market cap of $455.6 million and is part of the financial sector. Shares are down 23.5% year-to-date as of the close of trading on Thursday. Currently there are 2 analysts who rate HCI Group a buy, no analysts rate it a sell, and 2 rate it a hold.

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TheStreet Ratings rates HCI Group as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, expanding profit margins, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from TheStreet Ratings analysis on HCI go as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 19.7%. Since the same quarter one year prior, revenues rose by 11.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Insurance industry and the overall market, HCI GROUP INC's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • 45.60% is the gross profit margin for HCI GROUP INC which we consider to be strong. Regardless of HCI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, HCI's net profit margin of 24.78% significantly outperformed against the industry.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • HCI GROUP INC reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, HCI GROUP INC increased its bottom line by earning $5.65 versus $3.08 in the prior year. For the next year, the market is expecting a contraction of 15.6% in earnings ($4.77 versus $5.65).

You can view the full analysis from the report here: HCI Group Ratings Report

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At the close, Global Indemnity ( GBLI) was down $0.53 (2.0%) to $25.61 on heavy volume. Throughout the day, 27,675 shares of Global Indemnity exchanged hands as compared to its average daily volume of 17,100 shares. The stock ranged in price between $25.46-$26.05 after having opened the day at $26.04 as compared to the previous trading day's close of $26.14.

Global Indemnity, plc, through its subsidiaries, operates as a specialty property and casualty insurer. The company operates through two segments, Insurance Operations and Reinsurance Operations. Global Indemnity has a market cap of $346.4 million and is part of the financial sector. Shares are up 3.3% year-to-date as of the close of trading on Thursday. Currently there are no analysts who rate Global Indemnity a buy, no analysts rate it a sell, and 1 rates it a hold.

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TheStreet Ratings rates Global Indemnity as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, compelling growth in net income, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from TheStreet Ratings analysis on GBLI go as follows:

  • GBLI's very impressive revenue growth greatly exceeded the industry average of 19.7%. Since the same quarter one year prior, revenues leaped by 59.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • GBLI's debt-to-equity ratio is very low at 0.16 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • 40.47% is the gross profit margin for GLOBAL INDEMNITY PLC which we consider to be strong. It has increased significantly from the same period last year. Along with this, the net profit margin of 29.19% significantly outperformed against the industry average.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Insurance industry. The net income increased by 283.3% when compared to the same quarter one year prior, rising from $8.66 million to $33.21 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Insurance industry and the overall market on the basis of return on equity, GLOBAL INDEMNITY PLC has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.

You can view the full analysis from the report here: Global Indemnity Ratings Report

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Life Partners Holdings ( LPHI) was another company that pushed the Insurance industry lower today. Life Partners Holdings was down $0.04 (2.0%) to $1.99 on light volume. Throughout the day, 4,506 shares of Life Partners Holdings exchanged hands as compared to its average daily volume of 20,200 shares. The stock ranged in price between $1.99-$2.09 after having opened the day at $2.00 as compared to the previous trading day's close of $2.03.

Life Partners Holdings, Inc., through its subsidiary, Life Partners, Inc., operates in the secondary market for life insurance worldwide. It facilitates the sale of life settlements between sellers and purchasers, but does not take possession or control of the policies. Life Partners Holdings has a market cap of $38.6 million and is part of the financial sector. Shares are up 14.0% year-to-date as of the close of trading on Thursday.

TheStreet Ratings rates Life Partners Holdings as a sell. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity and generally disappointing historical performance in the stock itself.

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Highlights from TheStreet Ratings analysis on LPHI go as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Diversified Financial Services industry. The net income has significantly decreased by 203.4% when compared to the same quarter one year ago, falling from $1.68 million to -$1.74 million.
  • Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Diversified Financial Services industry and the overall market, LIFE PARTNERS HOLDINGS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • In its most recent trading session, LPHI has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • LIFE PARTNERS HOLDINGS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, LIFE PARTNERS HOLDINGS INC continued to lose money by earning -$0.13 versus -$0.16 in the prior year.
  • Net operating cash flow has significantly increased by 61.65% to -$1.10 million when compared to the same quarter last year. In addition, LIFE PARTNERS HOLDINGS INC has also vastly surpassed the industry average cash flow growth rate of 0.71%.

You can view the full analysis from the report here: Life Partners Holdings Ratings Report

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