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Is Axis Capital Holdings (AXS) Stock Undervalued Right Now?

·3 min read

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company to watch right now is Axis Capital Holdings (AXS). AXS is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A.

AXS is also sporting a PEG ratio of 1.84. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. AXS's PEG compares to its industry's average PEG of 2.85. Over the past 52 weeks, AXS's PEG has been as high as 2.62 and as low as 1.72, with a median of 2.03.

We should also highlight that AXS has a P/B ratio of 1.09. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 1.28. Within the past 52 weeks, AXS's P/B has been as high as 1.13 and as low as 0.79, with a median of 0.93.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. AXS has a P/S ratio of 0.9. This compares to its industry's average P/S of 0.94.

Finally, investors will want to recognize that AXS has a P/CF ratio of 6.65. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. AXS's current P/CF looks attractive when compared to its industry's average P/CF of 7.04. Over the past year, AXS's P/CF has been as high as 16.92 and as low as 6, with a median of 8.49.

Another great Insurance - Property and Casualty stock you could consider is Universal Insurance Holdings (UVE), which is a # 2 (Buy) stock with a Value Score of A.

Furthermore, Universal Insurance Holdings holds a P/B ratio of 1.02 and its industry's price-to-book ratio is 1.28. UVE's P/B has been as high as 1.41, as low as 0.82, with a median of 0.95 over the past 12 months.

These are only a few of the key metrics included in Axis Capital Holdings and Universal Insurance Holdings strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, AXS and UVE look like an impressive value stock at the moment.


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