HCI Group (HCI) Soars 3.6%: Is Further Upside Left in the Stock?

HCI Group (HCI) shares rallied 3.6% in the last trading session to close at $145. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 0.5% gain over the past four weeks.

Growing homeowners business, acquiring profitable books of business, proactively managing risk and loss costs and deploying excess capital into investments and growth initiatives fuel growth.

Premiums should improve attributable to policies assumed from Citizen through TypTap and a higher average premium per policy and the addition of Condo Owners Reciprocal Exchange  HCI formed Condo Owners Reciprocal Exchange to write commercial and residential insurance in Florida. It combines technology and industry knowledge to drive growth.

Its solid performance testifies effective risk management and underwriting strategies. Deploying excess capital into investments and growth initiatives well poise the company for growth.

This property and casualty insurance holding company is expected to post quarterly earnings of $4.49 per share in its upcoming report, which represents a year-over-year change of +23%. Revenues are expected to be $210.17 million, up 1.7% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For HCI Group, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on HCI going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

HCI Group is a member of the Zacks Insurance - Property and Casualty industry. One other stock in the same industry, First American Financial (FAF), finished the last trading session 2.1% lower at $59.98. FAF has returned -1.2% over the past month.

First American Financial's consensus EPS estimate for the upcoming report has changed -1.4% over the past month to $0.67. Compared to the company's year-ago EPS, this represents a change of +48.9%. First American Financial currently boasts a Zacks Rank of #3 (Hold).

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This article originally published on Zacks Investment Research (zacks.com).

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