(ACGL) - Over the past 16 quarters, ACGL topped analysts' earnings expectations in 15 quarters

Arch Capital Group, Ltd. (ACGL), a Zacks #1 Rank stock, exceeded analysts' earnings expectations in 15 out of the past 16 quarters. Earnings per share are forecasted to grow 16% over the next 3-5 years. Consensus estimates for this quarter and for the full year of 2006 have been climbing. ACGL has a price-to-book ratio of only 1.5, considerably lower when compared to 5.2 for the market. The company's PEG ratio is 0.51. Full Analysis Arch Capital Group, Ltd. writes insurance and reinsurance on a worldwide basis through its operations in Bermuda, the United States, Europe and Canada. Over the past 16 quarters, ACGL topped analysts' earnings expectations in 15 quarters, while missing on only one occasion. Earnings per share grew 42.0% over the past five years. For the second quarter of 2006, the company posted profits of $171.0 million, or $2.24 per share. With analysts calling for $1.89 per share, this amounted to an 18.5% positive earnings surprise. In the second quarter of 2005, ACGL reported earnings per share of $1.53. Thus, the company enjoyed a 46.4% year-over-year improvement. Total revenues jumped 7.8% to $859.2 million. Looking ahead, earnings per share are forecasted to grow 16% over the next 3-5 years. This compares quite favorably to the expected growth rate of the industry which currently stands at 12%. The consensus estimate for this quarter soared 25.6% to $1.62 over the past 60 days. For the full year of 2006, profit forecasts jumped 6.8% to $7.58 over the same period of time. Two analysts upped their earnings estimates for this quarter while three followed suit for the full year. ACGL is currently trading at a valuation of 16.6x trailing 12-month earnings and at 8.0x current fiscal-year estimated earnings. The market, as represented by the S&P 500, is trading at a valuation of 16.6x trailing 12-month earnings and at 16.0x its current fiscal-year estimated earnings. ACGL has a price-to-book ratio of only 1.5, considerably lower when compared to 5.2 for the market. The company's PEG ratio of 0.51 is also an indication of its discounted valuation. ACGL's return on equity, a common measure of profitability, tops that of the industry average—14% compared to 11%. Note: The Zacks Rank is a very sensitive indicator that can change frequently for an individual stock. This important indicator is updated daily on Zacks.com and is available to Zacks Premium subscribers. As such, it is prudent to check the site for the latest Zacks Rank on the stocks highlighted in this section. Simply click the link for the stock or enter the symbol in the ticker entry box in the upper left hand corner of the web site. Content Courtesy: Zacks Investment Research #1 Ranked Stocks Highlight Archive To truly take advantage of the Zacks Rank, you need to first understand how it works. That is why we created the free special report: Zacks Rank Guide: Harnessing the Power of Earnings Estimate Revisions. | Blog Home| VitalStocks Home