Should Value Investors Buy RenaissanceRe (RNR) Stock?
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.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 company value investors might notice is RenaissanceRe (RNR). RNR is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock holds a P/E ratio of 11.82, while its industry has an average P/E of 27.62. RNR's Forward P/E has been as high as 19.97 and as low as -14.39, with a median of 12.79, all within the past year.
Investors should also note that RNR holds a PEG ratio of 1.24. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. RNR's PEG compares to its industry's average PEG of 3.15. Over the past 52 weeks, RNR's PEG has been as high as 2.10 and as low as -1.51, with a median of 1.35.
Another notable valuation metric for RNR is its P/B ratio of 1.33. 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. RNR's current P/B looks attractive when compared to its industry's average P/B of 1.50. RNR's P/B has been as high as 1.41 and as low as 1.15, with a median of 1.28, over the past year.
These are only a few of the key metrics included in RenaissanceRe's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, RNR looks like an impressive value stock at the moment.
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