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Valued at a market cap of almost $22.1 billion, W. R. Berkley Corporation (WRB) is an insurance holding company that operates as a commercial lines writer worldwide. The Greenwich, Connecticut-based company's competitive advantage lies in its long-term strategy of decentralized operations, allowing each of its units to identify and respond quickly and effectively to changing market conditions and local customer needs.
Companies worth $10 billion or more are generally described as “large-cap” stocks and W. R. Berkley fits right into that category with its market cap exceeding this threshold. The property and casualty insurance providers over 60 insurance businesses serve a niche market and possess specialized knowledge regarding an industry, product, or region.
WRB is currently trading 11.4% below its 52-week high of $65.49, reached on Nov. 27. Shares of this insurance company have increased nearly 1% over the past three months, slightly outperforming the broader Dow Jones Industrials Average’s ($DOWI) marginal gain during the same time frame.
Moreover, in the longer term, WRB has soared 24.1% over the past 52 weeks, significantly outperforming DOWI’s 12.7% returns. Shares of WRB are up 23.1%, on a YTD basis, surpassing DOWI’s 12.3% gains over the same time frame.
To confirm its recent bearish trend, WRB has been trading below its 50-day moving average since mid December. Nevertheless, it has been trading above its 200-day moving average since the past one year.
WRB’s shares fell 4.1% after its mixed Q3 earnings release on Oct. 21. The company’s adjusted earnings of $0.93 per share, increased 3.3% annually and surpassed the Wall Street estimates of $0.92. On the other hand, its revenue climbed 11.1% year-over-year to $3.4 billion, however slightly missed the consensus estimates.
Despite significant catastrophic events, including four hurricanes, the company’s revenue and bottom-line growth can be primarily attributed to strong underwriting margins and increasing investment income. Moreover, WRB continues to benefit from its strategic growth and disciplined capital deployment.
WRB’s outperformance looks even more pronounced when compared to its rival, American Financial Group, Inc. (AFG) which gained 13.1% over the past 52 weeks and 14.8% on a YTD basis.
Looking at WRB’s outperformance, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 16 analysts covering it, and the mean price target of $65.14 suggests a modest 12.3% premium to its current levels.
