Mercury General (MCY) Shares Down 7% on Disappointing Earnings

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Shares of Mercury General Co. (NYSE:MCY) dropped 7% on Monday after the company announced weaker than expected quarterly earnings. The stock traded as low as $48.89 and last traded at $49.67. Approximately 1,894,299 shares traded hands during mid-day trading, an increase of 218% from the average daily volume of 595,346 shares. The stock had previously closed at $53.41.

The insurance provider reported ($0.26) earnings per share (EPS) for the quarter, missing the consensus estimate of $0.74 by ($1.00). Mercury General had a net margin of 2.80% and a return on equity of 7.13%. The firm had revenue of $850.70 million during the quarter, compared to analyst estimates of $832.44 million. During the same period last year, the firm earned $0.15 EPS. Mercury General’s quarterly revenue was up 9.2% on a year-over-year basis.

MCY has been the subject of several research analyst reports. Zacks Investment Research raised shares of Mercury General from a “hold” rating to a “buy” rating and set a $57.00 price target for the company in a report on Wednesday, January 9th. Keefe, Bruyette & Woods set a $69.00 price target on shares of Mercury General and gave the company a “buy” rating in a report on Monday, October 29th. Finally, ValuEngine lowered shares of Mercury General from a “buy” rating to a “hold” rating in a report on Wednesday, January 2nd.

Hedge funds and other institutional investors have recently made changes to their positions in the stock. Man Group plc acquired a new position in Mercury General in the 3rd quarter worth $8,441,000. Commonwealth Bank of Australia acquired a new position in shares of Mercury General during the 3rd quarter worth about $195,000. Verition Fund Management LLC boosted its stake in shares of Mercury General by 191.6% during the 3rd quarter. Verition Fund Management LLC now owns 13,587 shares of the insurance provider’s stock worth $682,000 after buying an additional 8,927 shares during the last quarter. Fox Run Management L.L.C. acquired a new position in shares of Mercury General during the 4th quarter worth about $289,000. Finally, Bank of New York Mellon Corp boosted its stake in shares of Mercury General by 4.8% during the 2nd quarter. Bank of New York Mellon Corp now owns 537,048 shares of the insurance provider’s stock worth $24,469,000 after buying an additional 24,606 shares during the last quarter. 48.91% of the stock is owned by hedge funds and other institutional investors.

The company has a debt-to-equity ratio of 0.21, a quick ratio of 0.40 and a current ratio of 0.40. The company has a market capitalization of $2.96 billion, a P/E ratio of 30.29, a PEG ratio of 0.32 and a beta of 0.22.

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About Mercury General (NYSE:MCY)

Mercury General Corporation, together with its subsidiaries, engages in writing personal automobile insurance in the United States. The company also writes homeowners, commercial automobile, commercial property, mechanical protection, fire, and umbrella insurance. Its automobile insurance products cover collision, property damage, bodily injury, comprehensive, personal injury protection, underinsured and uninsured motorist, and other hazards; and homeowners insurance products cover dwelling, liability, personal property, fire, and other hazards.

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