Validea's pick of the week provides a detailed report on a company that scores well in the stock-screening service's model portfolios. On Validea.ca, investors can analyze 1,000 Canadian stocks through 12 different guru-based models and get individual reports on each company. Globe Investor has a distribution agreement with Validea.ca. Try it.
New York City-based AmTrust Financial Services is a multinational property and casualty insurer specializing in coverage for small businesses. With a market cap of $4.4-billion ((U.S.), AmTrust offers workers' compensation insurance, extended warranty coverage, specialty middle-market property and casualty insurance and a host of related products and services.
AmTrust has grown earnings at a 24-per-cent pace over the long term (using an average of the 3-, 4- and 5-year EPS growth rates), which the Peter Lynch based model likes. The Lynch model also likes its 0.43 PE-to-growth ratio. The company also has an equity/assets ratio of 15 per cent, far surpassing the Lynch model's 5-per-cent target.
AmTrust has upped EPS in all but one year of the past decade, which the Warren Buffett-based model likes. The company has averaged a 25.1-per-cent return on retained earnings (those not paid out as dividends) over the past decade, which the Buffett model also likes.
The Martin Zweig-based model likes that the company's EPS growth has been fueled by revenue growth -- the firm has grown revenues at a 38-per-cent pace (using an average of the 3-, 4- and 5-year sales growth rates).
AmTrust gets strong interest from the James O'Shaughnessy-based growth model, thanks to its combination of good momentum (92 relative strength over past 12 months) and reasonable 1.1 price/sales ratio. The company also has a strong 19-per-cent return on equity (TTM).
John Reese is long AFSI.
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