AmTrust's growth rate of 85.71 per cent passes the Zweig-inspired model.
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Amtrust Financial Services, Inc. (AmTrust) is an insurance holding company. The company, through its subsidiaries, provides specialty property and casualty insurance focusing on workers' compensation and commercial package coverage for small business, specialty risk and extended warranty coverage, and property and casualty coverage for middle market business.
AFSI's P/E Ratio of 9.4, based on trailing 12-month earnings, is favoured by my Martin Zweig-based investment model, which also likes AFSI's current quarter earnings per share, as well as its quarterly earnings one year ago, both of which must be positive. AFSI's current EPS is $0.78, and EPS for this quarter last year was $0.42.
The growth rate of the current quarter's earnings compared to the same quarter a year ago must also be positive to get a passing score from the Zweig-inspired model. AFSI's growth rate of 85.71 per cent passes this test.
AFSI's Equity/Assets Ratio of 15 per cent is extremely healthy and favored by my Peter Lynch-inspired investment model.
Return on Assets (ROA) is another criterion examined by the Lynch-based model to measure a financial intermediary's profitability. AFSI's ROA of 2.73 per cent passes this model's test.
AFSI's ROA is also favored by my Warren Buffett-based model, which looks for consistently higher-than-average ROA (ROA must be at least 1 per cent over the last ten years). AFSI's ROA for the last 10 years, from earliest to latest, is 4.2 per cent, 3.8 per cent, 2.6 per cent, 3.0 per cent, 3.1 per cent, 2.6 per cent, 2.3 per cent, 2.4 per cent, 3.1 per cent, 2.9 per cent.
The Buffett-inspired model also likes AFSI's use of retained earnings. Based on retained earnings over the previous ten years of $11.11 and EPS over the same period of $2.41, AFSI's management has proven it can earn shareholders a 21.7 per cent return on the earnings they kept, more than acceptable to the Buffett model.
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