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Why HCC Insurance Is Poised to Keep Popping

By Brian D. Pacampara, CFA - Apr 10, 2013 at 10:04AM

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Market-trouncing returns could be written in these five stars.

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, specialty insurance underwriter HCC Insurance Holdings (NYSE: HCC) has earned a coveted five-star ranking.

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

HCC facts

Headquarters (founded)

Houston, Texas (1974)

Market Cap

$4.2 billion

Industry

Multi-line insurance

Trailing-12-Month Revenue

$2.5 billion

Management

CEO Christopher Williams (since 2012)
COO William Burke, Jr. (since 2012)

Return on Equity (average, past 3 years)

10.1%

Cash / Debt

$434.4 million / $583.9 million

Dividend Yield

1.6%

Competitors

ACE Limited
Travelers Companies
W.R. Berkley

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 93% of the 197 members who have rated HCC believe the stock will outperform the S&P 500 going forward.

Just yesterday, one of those Fools, rtc76, succinctly summed up the HCC bull case for our community:

In a challenging interest rate environment, underwriting profit is essential. HCC has some of the lowest combined ratios in the insurance biz, and the company philosophy is explicitly focused on book value growth and maintaining underwriting profitability. At $42 it's underpriced with a margin of safety according to my calculations.

Want to see how well (or not so well) the stocks in this series are performing? Follow the TrackPoisedTo CAPS account.

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