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JimVanMeerten (58.46)

Time for insurance stocks



March 04, 2011 – Comments (0) | RELATED TICKERS: EIG

In the long run I always like well run insurance companies when the market is booming.  Insurance companies have a simple business plan: underwrite properly and make a profit on the float of money between the time you collect premiums and pay out benefits.  When all the stars are aligned you can make a good investment in these stocks and I think now is that time.

That's not the only reason I added Employer's Holdings (EIG) to the Barchart Van Meerten New High portfolio.

EMPLOYERS HOLDING (EIG) is a group of companies providing workers compensation insurance and services to select, small American businesses. They understand the workers compensation insurance needs of independent, entrepreneurial businesspeople because they focus on only one type of customer small businesses. They understand the small business based risks of workplace injury and accident, and they work hard to help protect each insured business's bottom line.

Technical Factors:

1 - 96% Barchart technical buy signal

2 - Trend Spotter (tm) buy signal

3 - 14 new highs and up 17.42% in the last month

4 - Relative Strength Index is 78.92% and rising

5 - Trades around 20.37 with a 50 day moving average of 17.85

Fundamental Factors:

1 - Wall Street brokerage analysts have 3 buy and 4 hold recommendations published

2 - Revenue is expected to increase by 25.20% this year and 5.30% next year

3 - Earnings are estimated to increase by 6.50% this year, 11.40% next year and 8.33% annually for the next 5 years

4 - Last November the company announced a $100 million stock buy back program and that always adds value without tax consequences

Investor Sentiment:

1 - CAPS members on Motley Fool vote 88 to 4 that the stock will beat the market

2 - All Stars agree with a vote of 32 to 0

3 - Fool notes that articles about the company have all been positive

I really think now is the time to buy well run insurance stocks but if you don't at least add this one to your watch lists.

Jim Van Meerten is an analyst for  Marketocracy Capital Management.  He shares his knowledge and experience from over 40 years of investing in stocks, mutual funds and ETFs  in his daily blog -- Barchart Portfolio Blogs.
Through Marketocracy Capital Management  you can have a Separately Managed Account that mirrors his Barchart Van Meerten New High model portfolio.

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