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Selective Insurance Group, Inc. ( NASDAQ:SIGI ), which is in the insurance business, and is based in United States, saw a decent share price growth in the teens level on the NASDAQGS over the last few months. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Today I will analyse the most recent data on Selective Insurance Group’s outlook and valuation to see if the opportunity still exists.
Is Selective Insurance Group still cheap?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 10.6% above my intrinsic value, which means if you buy Selective Insurance Group today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $68.53, there’s only an insignificant downside when the price falls to its real value. In addition to this, Selective Insurance Group has a low beta, which suggests its share price is less volatile than the wider market.
What kind of growth will Selective Insurance Group generate?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to grow by a double-digit 13% in the upcoming year, the short-term outlook is positive for Selective Insurance Group. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? SIGI’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping an eye on SIGI, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Selective Insurance Group. You can find everything you need to know about Selective Insurance Group in the latest infographic research report . If you are no longer interested in Selective Insurance Group, you can use our free platform to see my list of over 50 other stocks with a high growth potential .
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com . This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.