Josh Brown calls a breakout in this insurance stock that has been going sideways for a year
(This is The Best Stocks in the Market , brought to you by Josh Brown and Sean Russo of Ritholtz Wealth Management.) Josh — Pure and simple, Allstate (ALL) is a breakout in progress. It’s not quite there, but it’s close enough. I’m calling it. After a long period of consolidation, we’re now seeing price challenging the upper end of the range, which I will describe below after Sean tells you the story. Yes, we’re in a market being led by the AI capex boom. No, that doesn’t mean AI-related stocks are the only game in town. Are we in good hands with Allstate trading just below record highs? Let’s get into it. Best Stock Spotlight: The Allstate Corp. (ALL) Sean — Allstate (and many other insurance businesses) is essentially an insurance premium collection business. They take in premiums, pay out claims, and profit on the spread. The core engine driving premium growth is property-liability insurance (auto and home), which generated $14.8B in earned premiums in Q1 2026, with profitability surging. Profitability increased due to lower-than-expected catastrophe losses and meaningful rate increases (7.2% passed on to homeowners, which you have probably heard about on the news), leading to net investment income growth of 10% year over year. Allstate is also growing its policy base to 212 million, which adds volume on top of the pricing. The biggest wildcard in any given period is catastrophe exposure — a bad hurricane or wildfire season can erase underwriting gains you see quarter to quarter. Allstate has seen a steady grind higher. The stock has made 17 new all time highs this year. It’s been a consistent move, not one dictated by one or two blow-out days. In total return, the stock is up 28% the past year and 87% the past three years (23% annualized). On top of the company’s insurance premium investments, the company allocates capital through the use of buybacks and dividends as well. Both the dividend (2% yield) and their buyback program are big components of their total return. In total, Allstate returned $881 million to shareholders in Q1 2026 through a combination of dividends and share repurchases, with common shares down 3% year over year to start 2026. Now here’s Josh on the technicals… Risk management Josh — ALL spent the better part of last year going nowhere, grinding between $190 and $205 as the market weighed whether the business had turned a corner. It had. The stock broke out of that long consolidation range in late Q1 2026 and pushed into the $220 area before pulling back to digest the move. It’s now cooling off just above the 50-day moving average, sitting on a clean launching pad for what could be a breakout above $222 and into fresh all-time-high territory. Sean will have more on the fundamentals. RSI at 52 leaves plenty of room for a move higher without the momentum crowding that tends to reverse quickly. This is a healthy amount of momentum as the stock digests a big run. I love seeing a stock hold its ground after a rally and that’s what is happening here. Traders watching ALL want to see $220 clear and hold on volume, which opens the chart up into a brand new range. For traders, the 50-day at $211 is the logical stopping point on any further weakness but it’s too close and could create a whipsaw, so I’d use the 200-day at $206 as the deeper support level. A close below $200 wrecks the chart and we’re falling out of the bottom of the range. DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
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