PowerRating Stock Spotlight: Everest Reinsurance

Mount Everest is the highest point on earth and its summit is the pinnacle goal of mountain climbers worldwide. Our stock spotlight this week is focused on a company who took its name from the fabled mountain, Everest Reinsurance Company. Like their namesake, they have earned the highest Long Term Power Rating available, the summit, if you will, of our ranking system, a 10. This was accomplished within an industry sector that has consistently earned top ratings of 8 or higher. The Long Term Power Ratings are based on 12 years of extensive, statistically significant studies, across most market environments. Our research has clearly shown that stocks that earn a 10 rating have a 81% chance of being higher one year later. Those possessing a 9 rating have a 79.1% chance of trading higher one year later. In this volatile, uncertain market environment, allow Long Term Power Ratings to assist you in building a profitable and safe portfolio.

Everest Reinsurance Company (RE | Quote | Chart | News | PowerRating) was founded in 1973 as Prudential Reinsurance Company. In 1996, they adopted the Everest name, soon expanding operations into Europe and Asia. All along the way, Everest has been acquiring companies and growing their presence. The $1 billion statutory surplus mark was hit in 1998, while Moody's upgraded them to AA- the same year. In 2008, operations were expanded into the thriving South American market opening an office in Rio Dijanero, Brazil. The Insurance segments premiums have increased 18% in the second quarter. However, the company has recently hit a slow patch due to factors related to the US economy, with revenue and EPS being slightly down in the quarter. The CEO, Joe Taranto, had positive words despite the downturn, "Our core business continues to perform very well as we maintain disciplined underwriting in an increasingly competitive environment." The company recently opened an environmental insurance facility and announced a dividend. Technically, price has been in an uptrend since mid July 2008 and is above its 50 day Simple Moving Average of $80.44.

Despite the recent negative data from the company, I believe it's a solid company in an excellent sector, well deserving of the 10 Long Term Power Rating.

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David Goodboy is Vice President of Marketing for a New York City based multi-strategy fund.