Insurance broker Brown & Brown is Wednesday's pick for IBD 50 Growth Stocks To Watch. Brown & Brown stock broke out of a cup-without-handle base Tuesday and is in a buy zone.
Investors seem to be growing weary of recent highflying growth stocks and are rotating to more defensive names. This became evident in Wednesday's IBD 50 list of growth stocks. The list included a handful of insurance stocks, while names like volatile telehealth play Hims & Hers Health got the boot after severe sell-offs. Be sure to read the IBD Big Picture column to see IBD's recommended market exposure, as it can change quickly.
Brown & Brown was the IBD Stock Of The Day last Wednesday. The firm offers insurance products for corporations, governmental institutions and individuals. Its insurance lines include property and casualty, employee benefits, workers' compensation as well as cyber risk and medical malpractice liability.
Brown & Brown stock ranks No. 2 out of 16 stocks in the Insurance-Brokers group. The group jumped to rank No. 74 out of the 197 industry groups that Investor's Business Daily tracks, up from the 90th spot four weeks ago.
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Brown & Brown Stock In A Buy Zone
The insurance name broke out of a cup base with a 114.15 buy point Tuesday in lighter-than-average volume. Brown & Brown stock climbed around 0.4% Wednesday morning and is sitting in a buy range up to 119.86, according to MarketSurge pattern recognition.
Shares reached a record high Wednesday and are on pace for their fourth-straight day of gains.
Its relative strength line hit a 52-week high as shown by the blue dot on the MarketSurge weekly chart.
Insurance Broker Shows Steady Profit Growth
The insurance broker beat fourth-quarter earnings and sales expectations Jan. 27. Profit growth accelerated to 25% from 18% and 12% in the prior two quarters. Revenue increased 15%, also improving from 11% and 13% over the same time period.
But estimates show profit growth sliding to 13% in the current quarter then trailing off to 5% over the next four quarters. Similarly, sales growth looks to fade from 12% in the first quarter to 5% over the next four periods.
Full-year earnings estimates have recently been revised up, with analysts now expecting a 9% rise in both 2025 and 2026. The insurance broker holds an IBD Earnings Stability factor of 5 out of 99 possible — showing stable earnings over the last three to five years — with a lower number being better. In addition, it has a strong 95 Earnings Per Share Rating and a robust 96 Composite Rating.
Its 1.7 up/down volume ratio shows positive demand for the stock over the last 50 days.
Management owns 16% of shares while mutual funds hold 52%. And funds have added Brown & Brown stock, with 1,708 owning shares in December, up from 1,699 in September and 1,640 in June.
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