Wednesday, April 18, 2007

I like Allstate for Today

I did not post yesterday because I was not really convinced the market could keep on rolling. I missed out on Intel, but Yahoo and others got killed. Today I am going back to my sweet spot of last week, insurance companies.

One of Progressive's (PGR) biggest competitors is Allstate (ALL), who reports today after the close. Progressive's report was great last week, citing that claims were at reasonably low level. That leads me to believe Allstate will be blessed with the same success. Allstate's P/E is 7.86, a little less than five points lower that PGR's. This means that this stock is inherently cheap and a good report could drive the stock back to a more appropriate price.

Earnings Whispers projects earnings of $1.93, six cents above analysts expectations. The stock is still five points off of its 52 week high, so it faces little resistance to a big up-swing when a good report happens. It appears that many are buying this bad boy today going into earnings, so act quickly!

Good Luck!

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