Are Investors Undervaluing Arch Capital Group (ACGL) Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
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.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One stock to keep an eye on is Arch Capital Group (ACGL). ACGL is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 9.62. This compares to its industry's average Forward P/E of 25.76. Over the last 12 months, ACGL's Forward P/E has been as high as 15.56 and as low as 9.40, with a median of 11.11.
Investors will also notice that ACGL has a PEG ratio of 0.96. 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 currently sports an average PEG of 2.40. ACGL's PEG has been as high as 1.56 and as low as 0.94, with a median of 1.11, all within the past year.
Investors could also keep in mind Axis Capital Holdings (AXS), an Insurance - Property and Casualty stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Shares of Axis Capital Holdings are currently trading at a forward earnings multiple of 6.46 and a PEG ratio of 1.29 compared to its industry's P/E and PEG ratios of 25.76 and 2.40, respectively.
AXS's Forward P/E has been as high as 9.98 and as low as 5.70, with a median of 6.60. During the same time period, its PEG ratio has been as high as 2, as low as 1.14, with a median of 1.32.
Axis Capital Holdings also has a P/B ratio of 1.05 compared to its industry's price-to-book ratio of 1.48. Over the past year, its P/B ratio has been as high as 1.31, as low as 1, with a median of 1.06.
These are only a few of the key metrics included in Arch Capital Group and Axis Capital 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, ACGL and AXS look like an impressive value stock at the moment.
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Arch Capital Group Ltd. (ACGL) : Free Stock Analysis Report
Axis Capital Holdings Limited (AXS) : Free Stock Analysis Report
