AmTrust Financial Services Inc. (AFSI:US) rallied the most since November 2012 in New York trading after profit beat analysts’ estimates.
The insurer gained 15 percent to $34.50 at 10:29 a.m. The stock has advanced 13 percent in the past year, compared with the 23 percent rise of the Russell 2000 Index. (RTY)
AmTrust has recovered from a 22 percent slump (AFSI:US) in December that was triggered by GeoInvesting, a website that provides research to subscribers, challenging the New York-based company’s accounting. Fourth-quarter operating income, which excludes some investment results, was $1.03 a share, AmTrust said today in a statement. That exceeded by 25 cents the average estimate (AFSI:US) of eight analysts surveyed by Bloomberg.
“The beat was driven by higher than forecasted earned premium, as the top line continues to grow,” FBR Capital Markets analysts led by Randy Binner wrote in a note. The economics of AmTrust’s “business are reflected in its accounting and these good quarterly results highlight why we recommend the name,” he said.
The insurer’s board approved last month the repurchase of as much as $150 million in shares as Chief Executive Officer Barry Zyskind sought to regain Wall Street’s confidence. The buyback plan marked the company’s first since 2007 (AFSI:US).
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