Financials are one of the few sectors that are well-positioned to succeed and grow in this inflationary environment. In IBD's Global Leaders screen, there are various insurance stocks that make the list, as well as a top biotech stock.
IBD's Insurance and Property Casualty group has outperformed recently, ranking 10th out of 197 industries. A few names from the group in the global stock leaders list are worth mentioning:
Axis Capital is a Bermuda-based company offering insurance products to customers worldwide. After posting record first-quarter premiums of $1.25 billion, premiums are expected to hold steady with EPS of $1.62 when Axis Capital reports its second-quarter earnings on July 26.
A Defensive Investment
As a defensive investment, Axis Capital is in a strong financial position. It has a diversified insurance portfolio helping earn an impressive A+ debt rating from S&P.
On the technical side, Axis Capital is forming a flat base with a 61.49 buy point. The stock slid more than 5% in Tuesday's market drop and is around the lows of its base. It's holding above the 200-day moving average.
Fellow Bermudan insurer Arch Capital is also trading strongly with a relative strength line near highs as shares form a double bottom at a 48.03 buy point. The stock fell below the 200-day line Tuesday.
As with Axis Capital, growth has been strong for Arch Capital. After reporting earnings of $3.58 last year, EPS is projected to increase substantially to $4.37 and $5.15 in 2022 and 2023, respectively, according to FactSet. Arch Capital will report its second-quarter earnings on July 27. Analysts expect EPS of $1.09 on premiums of $2.3 billion.
Alkermes Trades With Strength On Bipolar Drug
Ireland-based Alkermes has been outperforming, now ranked eighth out of 800 stocks in IBD's biotech industry group. Shares are trading with a relative strength line at new highs as the stock forms a base with a 32.89 buy point.
Optimism has been strong thanks to the firm's Lybalvi, a treatment for bipolar conditions. Last quarter, the drug brought in $14 million of the company's $72.5 million in sales. However, for the full year Alkermes expects $75 million in sales of Lybalvi alone.
Investors will get an update on Lybalvi as well as Alkermes' other drugs when the company reports its second-quarter earnings later this month. EPS is estimated to be only a penny, with sales of $268 million. To note, Alkermes still expects an EPS loss of 2 cents for the year before returning to profitability in 2023, with a projected EPS of 53 cents.
