Is Arch Capital Group (ACGL) Stock Undervalued Right Now?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is Arch Capital Group (ACGL). ACGL is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 10.29, while its industry has an average P/E of 25.41. Over the past 52 weeks, ACGL's Forward P/E has been as high as 15.56 and as low as 10, with a median of 11.13.
We also note that ACGL holds a PEG ratio of 1.03. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ACGL's industry has an average PEG of 2.39 right now. Within the past year, ACGL's PEG has been as high as 1.56 and as low as 1, with a median of 1.11.
CNA Financial (CNA) may be another strong Insurance - Property and Casualty stock to add to your shortlist. CNA is a # 1 (Strong Buy) stock with a Value grade of A.
CNA Financial is trading at a forward earnings multiple of 8.97 at the moment, with a PEG ratio of 1.80. This compares to its industry's average P/E of 25.41 and average PEG ratio of 2.39.
Over the past year, CNA's P/E has been as high as 11.66, as low as 8.36, with a median of 9.05; its PEG ratio has been as high as 2.33, as low as 1.67, with a median of 1.11 during the same time period.
Additionally, CNA Financial has a P/B ratio of 1.34 while its industry's price-to-book ratio sits at 1.43. For CNA, this valuation metric has been as high as 1.42, as low as 1.13, with a median of 1.25 over the past year.
These are only a few of the key metrics included in Arch Capital Group and CNA Financial strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, ACGL and CNA look like an impressive value stock at the moment.
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Arch Capital Group Ltd. (ACGL) : Free Stock Analysis Report
CNA Financial Corporation (CNA) : Free Stock Analysis Report
