Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Infinity Property and Casualty Corporation stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Infinity Property and Casualty has a trailing twelve months PE ratio of 26.57. This level compares pretty unfavorably with the market at large, as the PE ratio for the S&P 500 comes in at about 20.36.
If we focus on the long-term trend of the stock the current level puts Infinity Property and Casualty’s current PE above its median (which stands at 23.59) over the past five years. However, the current level is well below the highs for the stock.
Delving deeper into the PE’s inputs we found out that the reason behind the company’s erratic PE trend is its volatile earnings trajectory. While price movement has somewhat been sloping upwards, earnings have seen rather sharp falls, thereby having an inflating effect on the PE metric.
However, analysts now expect the earnings trend to fairly stabilize over the coming period. This is why the forward PE (price relative to this year’s earnings) for the stock stands at 22.46 currently – a figure that is much lower than the trailing twelve months level.
Further, at present, the stock’s PE compares unfavorably with the Zacks classified Insurance - Property and Casualty industry’s trailing twelve months PE ratio, which stands at 21.43. At the very least, this indicates that the stock is relatively overvalued right now, compared to its peers. However, once earnings stabilize, this difference in valuation can be erased.
PS Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Infinity Property and Casualty has a P/S ratio of about 0.71. This is considerably lower than the Zacks categorized Insurance - Property and Casualty industry average, which comes in at 1.88 right now. In fact, the stock has always been relatively undervalued compared to the industry, in this respect.
Notably, IPCC is actually at its highest point in the time period per the P/S metric, which suggests that the company’s stock price has already appreciated quite a bit, relative to its sales.
PEG Ratio
While earnings are certainly important, it is essential to know how much you are paying for the growth of earnings as well. One can easily do that with the PEG ratio (ratio of the P/E to the expected future earnings growth rate).The PEG ratio gives a more complete picture of the valuation of a stock than the P/E ratio.
Infinity Property and Casualty’s PEG ratio stands at just 2.52, compared with the Zacks Insurance - Property and Casualty industry average of 3.32. This suggests a decent undervalued trading relative to its earnings growth potential right now.
Broad Value Outlook
In aggregate, Infinity Property and Casualty currently has a Zacks Value Style Score of ‘B’, putting it into the top 40% of all stocks we cover from this look. This makes Infinity Property and Casualty a decent choice for value investors.
What About the Stock Overall?
Though Infinity Property and Casualty might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘B’ and a Momentum score of ‘A’. This gives IPCC a Zacks VGM score—or its overarching fundamental grade—of ‘A’. (You can read more about the Zacks Style Scores here >>)
Our VGM Score identifies stocks that have the most attractive value, growth, and momentum characteristics, and a good VGM score can increase your odds of success. All things considered, Infinity Property and Casualty seems to have pretty striking prospects.
Meanwhile, the company’s recent earnings estimates have been trending upwards lately. The current quarter has seen one estimate go higher in the past thirty days compared to none lower, while the full year estimate has seen two upward revisions versus no downward revision in the same time period.
This has had a meaningful impact on the consensus estimate, as the current quarter consensus estimate has moved north by 15.7% in the past month, while the full year estimate has inched higher by 8.8%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Infinity Property and Casualty Corporation Price and Consensus
The stock holds a Zacks Rank #3 (Hold), which indicates expectations of in-line performance from the company in the near term. However, Infinity Property and Casualty is enjoying bullish analyst sentiment, as indicated by the positive estimate revisions, and this works in the company’s favor.
Bottom Line
Infinity Property and Casualty is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. However, with a somewhat sluggish industry rank (Bottom 34% out of more than 250 industries) and a Zacks Rank #3, it is hard to get too excited about this company overall.
Nevertheless, the Trump administration brings hope for a bright future for the insurance industry and Infinity Property and Casualty could cash in on the same. So, value investors might want to wait for price to correct downwards a bit first, but once that happens, this stock could be a compelling value pick.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
Image: Bigstock
Is Infinity Property and Casualty (IPCC) Stock a Good Value Pick?
Value investing is easily one of the most popular ways to find great stocks in any market environment. After all, who wouldn’t want to find stocks that are either flying under the radar and are compelling buys, or offer up tantalizing discounts when compared to fair value?
One way to find these companies is by looking at several key metrics and financial ratios, many of which are crucial in the value stock selection process. Let’s put Infinity Property and Casualty Corporation stock into this equation and find out if it is a good choice for value-oriented investors right now, or if investors subscribing to this methodology should look elsewhere for top picks:
PE Ratio
A key metric that value investors always look at is the Price to Earnings Ratio, or PE for short. This shows us how much investors are willing to pay for each dollar of earnings in a given stock, and is easily one of the most popular financial ratios in the world. The best use of the PE ratio is to compare the stock’s current PE ratio with: a) where this ratio has been in the past; b) how it compares to the average for the industry/sector; and c) how it compares to the market as a whole.
On this front, Infinity Property and Casualty has a trailing twelve months PE ratio of 26.57. This level compares pretty unfavorably with the market at large, as the PE ratio for the S&P 500 comes in at about 20.36.
If we focus on the long-term trend of the stock the current level puts Infinity Property and Casualty’s current PE above its median (which stands at 23.59) over the past five years. However, the current level is well below the highs for the stock.
Delving deeper into the PE’s inputs we found out that the reason behind the company’s erratic PE trend is its volatile earnings trajectory. While price movement has somewhat been sloping upwards, earnings have seen rather sharp falls, thereby having an inflating effect on the PE metric.
However, analysts now expect the earnings trend to fairly stabilize over the coming period. This is why the forward PE (price relative to this year’s earnings) for the stock stands at 22.46 currently – a figure that is much lower than the trailing twelve months level.
Further, at present, the stock’s PE compares unfavorably with the Zacks classified Insurance - Property and Casualty industry’s trailing twelve months PE ratio, which stands at 21.43. At the very least, this indicates that the stock is relatively overvalued right now, compared to its peers. However, once earnings stabilize, this difference in valuation can be erased.
PS Ratio
Another key metric to note is the Price/Sales ratio. This approach compares a given stock’s price to its total sales, where a lower reading is generally considered better. Some people like this metric more than other value-focused ones because it looks at sales, something that is far harder to manipulate with accounting tricks than earnings.
Right now, Infinity Property and Casualty has a P/S ratio of about 0.71. This is considerably lower than the Zacks categorized Insurance - Property and Casualty industry average, which comes in at 1.88 right now. In fact, the stock has always been relatively undervalued compared to the industry, in this respect.
Notably, IPCC is actually at its highest point in the time period per the P/S metric, which suggests that the company’s stock price has already appreciated quite a bit, relative to its sales.
PEG Ratio
While earnings are certainly important, it is essential to know how much you are paying for the growth of earnings as well. One can easily do that with the PEG ratio (ratio of the P/E to the expected future earnings growth rate).The PEG ratio gives a more complete picture of the valuation of a stock than the P/E ratio.
Infinity Property and Casualty’s PEG ratio stands at just 2.52, compared with the Zacks Insurance - Property and Casualty industry average of 3.32. This suggests a decent undervalued trading relative to its earnings growth potential right now.
Broad Value Outlook
In aggregate, Infinity Property and Casualty currently has a Zacks Value Style Score of ‘B’, putting it into the top 40% of all stocks we cover from this look. This makes Infinity Property and Casualty a decent choice for value investors.
What About the Stock Overall?
Though Infinity Property and Casualty might be a good choice for value investors, there are plenty of other factors to consider before investing in this name. In particular, it is worth noting that the company has a Growth grade of ‘B’ and a Momentum score of ‘A’. This gives IPCC a Zacks VGM score—or its overarching fundamental grade—of ‘A’. (You can read more about the Zacks Style Scores here >>)
Our VGM Score identifies stocks that have the most attractive value, growth, and momentum characteristics, and a good VGM score can increase your odds of success. All things considered, Infinity Property and Casualty seems to have pretty striking prospects.
Meanwhile, the company’s recent earnings estimates have been trending upwards lately. The current quarter has seen one estimate go higher in the past thirty days compared to none lower, while the full year estimate has seen two upward revisions versus no downward revision in the same time period.
This has had a meaningful impact on the consensus estimate, as the current quarter consensus estimate has moved north by 15.7% in the past month, while the full year estimate has inched higher by 8.8%. You can see the consensus estimate trend and recent price action for the stock in the chart below:
Infinity Property and Casualty Corporation Price and Consensus
Infinity Property and Casualty Corporation Price and Consensus | Infinity Property and Casualty Corporation Quote
The stock holds a Zacks Rank #3 (Hold), which indicates expectations of in-line performance from the company in the near term. However, Infinity Property and Casualty is enjoying bullish analyst sentiment, as indicated by the positive estimate revisions, and this works in the company’s favor.
Bottom Line
Infinity Property and Casualty is an inspired choice for value investors, as it is hard to beat its incredible lineup of statistics on this front. However, with a somewhat sluggish industry rank (Bottom 34% out of more than 250 industries) and a Zacks Rank #3, it is hard to get too excited about this company overall.
Nevertheless, the Trump administration brings hope for a bright future for the insurance industry and Infinity Property and Casualty could cash in on the same. So, value investors might want to wait for price to correct downwards a bit first, but once that happens, this stock could be a compelling value pick.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>