5-Star Stocks Poised to Pop: AmTrust Financial

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, insurance holding company AmTrust Financial Services (NAS: AFSI) has earned a coveted five-star ranking.

With that in mind, let's take a closer look at AmTrust's business and see what CAPS investors are saying about the stock right now.

AmTrust facts

Headquarters

New York

Market Cap

$1.38 billion

Industry

Property and casualty insurance

Trailing-12-Month Revenue

$1.15 billion

Management

CEO Barry Zyskind

CFO Ronald Pipoly, Jr.

Return on Equity (Average, Past 3 Years)

21.8%

Cash/Debt

$354.9 million / $619.4 million

Dividend Yield

1.6%

Competitors

AIG

Markel (NYS: MKL)

Travelers (NYS: TRV)


Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

 

On CAPS, 98% of the 625 members who have rated AmTrust believe the stock will outperform the S&P 500 going forward. These bulls include KCinAustria and glenncv.

A few months ago, KCinAustria listed several of AmTrust's positives:

It's an easy to understand business (workers comp insurance, etc.), it actually makes money on its insurance ... it's not capital intensive, and the long term prospects seem reasonable. (I doubt workers comp insurance, or insurance in general, is going away in the next 5, 10, 20, or 50 years.)

Over the next five years, in fact, AmTrust is expected to grow its bottom line at a solid rate of 14% annually. That's faster than rivals like AIG (10%), Markel (11%), and Travelers (9%).

CAPS member glenncv elaborates on the AmTrust bull case:

I like a stock that can drive in low gear for an extended period of time without getting notice from Wall Street, and will not make the headlines at CNBC.

AFSI is a company that offers worker's compensation for small businesses and also sell extend service and warranty coverage's. AFSI stays away from the big boys and management is pretty conservative all this equals to profitability. ... The company has a return on equity over 20% (to me that is sexy enough).

Presently AFSI only operates in the U.S and Europe so plenty of room to expand. The stock price should continue to go higher as the book value continues to increase. They presently offer a 1.64% dividend yield.

What do you think about AmTrust, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Interested in another easy way to trackAmTrust?Add it to your watchlist.

At the time this article was published We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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