Insurance Stock Analyst Amit Kumar Gives All the Detail for His Picks and Pans

May 15, 2019

Amit Kumar is Director and Senior Analyst of P/C insurance at The Buckingham Research Group. Mr. Kumar currently focuses on large-cap multiline insurers, midcap insurers and Bermudian reinsurers.

Mr. Kumar previously worked at Macquarie Securities from 2009 to 2017. In 2005, Mr. Kumar joined Fox-Pitt Kelton, which was acquired by Macquarie Securities Group in 2009. Prior to that, he worked at Dowling & Partners Securities, LLC for four years.

In his exclusive 2,466 word interview with the Wall Street Transcript, Mr. Kumar lets investors know where he stands on many different insurance stocks:

“In our view, Progressive Insurance (NYSE:PGR) appears to be fully valued based on its current stock multiple. Our analysis of this data indicates that loss cost trends are plateauing, pricing is flat to down and repair costs are going up — partially offset by declining bodily injury costs.

We might be at the peak of this cycle and results might be flattish from here. Hence, we would consider lightening up on personal-auto-predominant stocks based on valuation.”

The specific recommendations come with specific reasoning and justification:

“Switching over to The Hanover Group, a smaller regional player, the three reasons are: one, impactful capital management from a disposition. The Hanover Group used to own a Lloyd’s of London entity called Chaucer.

This entity was sold in 2018, and The Hanover Group received north of $800 million of funds. These funds have been redeployed in an accelerated share repurchase program as well as a special dividend.

We anticipate additional return of capital in 2019 apart from the previously announced return of $450 million. There’s a documented correlation between how stocks perform compared to capital management strategies.”

Find out the rest of Mr. Amit Kumar’s picks in this key business sector as well as his top short idea for the year by reading the entire 2,466 word interview, exclusively in the Wall Street Transcript.