Employers Holdings, Inc. (NYSE:EIG)

CAPS Rating: 5 out of 5

The Company is a provider of workers' compensation insurance focused on select small businesses engaged in low to medium hazard industries.


Player Avatar mrindependent (35.94) Submitted: 6/24/2009 11:35:11 PM : Outperform Start Price: $12.74 EIG Score: -60.41

As a provider of workers compensation insurance, Employer's Holdings, Inc.'s revenues tend to vary with the total employment dollars earned by insured parties. Thus, revenue is down and so is profits. Fortunately, I expect that peak unemployment is only 3% away (from its current level of 9%). That leaves Employer's Holdings, Inc. with a 3% future problem. Seems small compared to the problems faced by many other companies. As an insurer, EIG enjoys a variable cost structure. Fixed costs are minimal. This means earnings are not particularly cyclical. Historical average ROE is over 20% with no debt. This definitely justifies a higher price/book ratio than 1.38. Trailing P/E is 6.8 and p/e based on estimated earnings this year is 10. Last but not least, this company scores a perfect 10 stock scouter rating and a 4 CAPS rating.

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Member Avatar valuemoney (< 20) Submitted: 2/5/2010 11:14:48 PM
Recs: 0

Had to follow u on this one also.

Member Avatar valuemoney (< 20) Submitted: 2/5/2010 11:22:05 PM
Recs: 0

Retained earnings are going in the right direction stock is being retired at cheap price. Insider buying. One con I see is their tax rate on past and present earnings, so current earnings are bloated a bit. So at first glance P/E seams extremely low.

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