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The analyst wrote in a research report: On the heels of the initiatives from the past year plus, Argo Group has started to put to rest excess capital concerns and has accordingly transformed into a global company with a multi-faced book of business including: (1) a U.S. specialty business; (2) a Bermuda specialty insurance and reinsurance division; and (3) a Lloyd's unit.
RBC Capital Markets Corp. analyst Mark Dwelle initiated coverage of Argo Group International Holdings Ltd. with a rating of "outperform," and a price target of $50. Dwelle set his 2008 and 2009 EPS estimates at $4.40 and $5.00, respectively.
The analyst wrote in a research report: "On the heels of the initiatives from the past year plus, Argo Group has started to put to rest excess capital concerns and has accordingly transformed into a global company with a multi-faced book of business including: (1) a U.S. specialty business; (2) a Bermuda specialty insurance and reinsurance division; and (3) a Lloyd's unit. Overall, we view the company's diversification strategy as a step in the right direction, which opens the door to write attractive business on a worldwide basis." The analyst added: "At 73% of book value, we find the valuation highly attractive for a company that has solid opportunities ahead to grow the franchise through many avenues (including acquisitions, new products, and new territories). With the overhang of the PXRE acquisition out of the way and the groundwork in place for the company's longer-term strategy, we think that the story should gain renewed investor attention with its multiple expanding closer to book value."
Copyright SNL Financial LC Jul 14, 2008