Here's why Cover-More Group Ltd is a fantastic buy today

Cover-More Group Ltd (ASX:CVO) could grow earnings at a terrific rate over the coming years.

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Bank of America Merrill Lynch has provided a relatively upbeat view on Cover-More Group Ltd (ASX: CVO), suggesting the company could grow earnings per share (EPS) at an average of 16% over the next three years making its current $2.17 price tag seem more than justifiable.

Cover-More Group is Australia's leading travel insurance business with an estimated 46% share of the local market, as well as a quickly expanding presence in relatively under-penetrated markets, including China and India. At their current price, the shares are trading on a projected P/E ratio of 20.1x with a market capitalisation of $693 million.

Despite the threat of an Ebola outbreak, strong growth in outbound travel is expected to continue for the foreseeable future which should bode well for the company. As reported by The Australian Financial Review, Merrill Lynch analysts believe this will help drive net profit 16% higher to $29 million in FY15 and makes the stock a 'buy'.

While investors should always take recommendations made by analysts or investment firms with a grain of salt (often, the recommendations can be short-sighted while investors should also engage in their own research to ensure they would be comfortable holding the stock), Cover-More Group certainly seems like an appealing prospect.

As the company continues to strengthen its position in the Australian, Indian and Chinese markets, Cover-More Group could be an excellent way to beat the market in the long term. With the shares currently trading 13.2% below their all-time high – recorded in May this year – now could be a great time to insure your portfolio.

Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned.

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