A Buy recommendation on Hallmark Financial (HALL) has gotten our attention, so we found out more by looking into the latest research report by Zacks senior insurance analyst Eric Rothmann:

'We continue to think there will be opportunities for the company to leverage its suite of products by broadening its geographical niches, as well as its current product offering within its existing markets in the coming years. The improved operating performance, financial flexibility and the capital raising initiatives by the parent should result in growth.

'Given our expectations for the price-to-book multiple to approach that of competitor Tower Group (TWGP), we are increasing our target price to $17.00 per share. This is up from $14.00 per share, based on our estimated book value of $8.95 per share at December 31, 2007.

'HALL initially operated a small chain of retail outlets specializing in providing financing for eyeglasses and contact lens. The focus changed into insurance products following the 1990 acquisitions of American Hallmark Insurance Company (AHIC) and American Hallmark General Agency (AHGA). Today, the company has evolved into a holding company for a group of diversified property and casualty insurance subsidiaries that retain low-severity (low losses) and short-tailed risks (one year).'