Meadowbrook Insurance Group Inc. (MIG) rose the most in the Standard and Poor’s SmallCap Financials Index as Stifel Financial Corp.’s KBW brokerage upgraded the company after it guarded its financial-strength rating.
Meadowbrook jumped 29 cents, or 4.1 percent, to $7.32 at 10:43 a.m. in New York. The Southfield, Michigan-based insurer had dropped 24 percent in the 12 months through the end of last week, compared with a 17 percent gain in the 107-company index.
The insurer was upgraded to outperform “based on the stock’s current valuation and, in our view, limited downside risk,” KBW analysts led by Robert Farnam said yesterday in a note to investors.
Meadowbrook, led by Chief Executive Officer Robert Cubbin, bolstered its finances by sharing risk through reinsurance and exiting less profitable businesses, A.M. Best Co. said last week. The ratings company affirmed its A- financial strength grade for Meadowbrook and removed the insurer from a review that threatened a ratings cut.
Farnam cited Best’s decision as he lifted his rating from market perform. He raised his price target from $7 a share.
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