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Why Argo Group (ARGO) Might be Well Poised for a Surge

Argo Group (ARGO) shares have started gaining and might continue moving higher in the near term, as indicated by solid earnings estimate revisions.

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This story originally appeared on Zacks

Investors might want to bet on Argo Group (ARGO), as earnings estimates for this company have been showing solid improvement lately. The stock has already gained solid short-term price momentum, and this trend might continue with its still improving earnings outlook.

- Zacks

Analysts' growing optimism on the earnings prospects of this property and casualty insurance underwriter is driving estimates higher, which should get reflected in its stock price. After all, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements. This insight is at the core of our stock rating tool -- the Zacks Rank.

The five-grade Zacks Rank system, which ranges from a Zacks Rank #1 (Strong Buy) to a Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record of outperformance, with Zacks #1 Ranked stocks generating an average annual return of +25% since 2008.

For Argo Group, strong agreement among the covering analysts in revising earnings estimates upward has resulted in meaningful improvement in consensus estimates for the next quarter and full year.

Current-Quarter Estimate Revisions

For the current quarter, the company is expected to earn $0.96 per share, which is a change of +284.62% from the year-ago reported number.

The Zacks Consensus Estimate for Argo Group has increased 8.24% over the last 30 days, as two estimates have gone higher compared to no negative revisions.

Current-Year Estimate Revisions

For the full year, the earnings estimate of $3.55 per share represents a change of +654.69% from the year-ago number.

There has been an encouraging trend in estimate revisions for the current year as well. Over the past month, two estimates have moved up for Argo Group versus no negative revisions. This has pushed the consensus estimate 27.93% higher.

Favorable Zacks Rank

The promising estimate revisions have helped Argo Group earn a Zacks Rank #2 (Buy). The Zacks Rank is a tried-and-tested rating tool that helps investors effectively harness the power of earnings estimate revisions and make the right investment decision. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Our research shows that stocks with Zacks Rank #1 (Strong Buy) and 2 (Buy) significantly outperform the S&P 500.

Bottom Line

While strong estimate revisions for Argo Group have attracted decent investments and pushed the stock 5.4% higher over the past four weeks, further upside may still be left in the stock. So, you may consider adding it to your portfolio right away.



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