A study of analyst recommendations at the major brokerages shows that Federated National Holding Co. (FNHC - Get Report) is the #40 broker analyst pick among those stocks screened by The Online Investor for strong stock buyback activity. To make that list, a stock must have repurchased at least 5% of its outstanding shares over the trailing twelve month period. In forming the rank, the analyst opinions from the major brokerage houses were tallied, and averaged; then, the list of stocks with strong buyback activity was ranked according to those averages.Investors are often keenly interested in knowing which companies are buying back their own stock, because companies often will only make such a move if they feel their stock is undervalued. Federated National Holding Co. is a company with strong buyback activity that is also considered a compelling buy by analysts; a bullish investor could take this to mean that sharp analyst minds came to the same bullish conclusion as the company itself that the stock is a good value, and therefore the stock should do well in the future. Analysts studying companies buying back their own stock will also factor into their analysis that future earnings will now be spread over a smaller share count, thereby increasing the per-share earnings the remaining shares will enjoy, versus what that same number would have been absent the stock buyback activity. FNHC operates in the Insurance Brokers sector, among companies like Chubb Ltd (CB) which is up about 1.3% today, and American International Group Inc (AIG) trading up by about 1.1%. Below is a three month price history chart comparing the stock performance of FNHC, versus CB and AIG. FNHC is currently trading up about 1.2% midday Monday.
More from Stocks
Replay: Jim Cramer on Earnings Season, China and Amazon Prime Day
Jim Cramer's breaking down what he expects from earnings season, China's slowing growth, and Amazon's Prime day sale.
Prime Day Isn't Just For Amazon -- Target, Walmart, Others Want a Piece Too
Amazon's retail competitors will see a 79% revenue lift around Prime Day, according to a projection from Adobe Analytics.
Jim Cramer: Even if Slowdown Hits, You'll Look Good With These Six Stocks
Estee Lauder is among the companies that are sure winners, no matter which way the economy goes.
Slack Rallies by 3% as Research Firms Initiate Bullish Coverage
Canaccord, Barclays and William Blair all published bullish notes on the messaging service, which went public via a direct listing in June.
Earnings to Soon Give Insight into Market's Strength
Are we seeing low-volume consolidation setting stage for thrust higher or is this stalling action suggesting a rollover? The answer depends on how earnings season develops.