Investors interested in stocks from the Insurance - Property and Casualty sector have probably already heard of Third Point Reinsurance (TPRE - Free Report) and Axis Capital (AXS - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Third Point Reinsurance and Axis Capital are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that TPRE likely has seen a stronger improvement to its earnings outlook than AXS has recently. However, value investors will care about much more than just this.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
TPRE currently has a forward P/E ratio of 9.70, while AXS has a forward P/E of 12.27. We also note that TPRE has a PEG ratio of 0.65. 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. AXS currently has a PEG ratio of 1.44.
Another notable valuation metric for TPRE is its P/B ratio of 0.83. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, AXS has a P/B of 1.07.
These are just a few of the metrics contributing to TPRE's Value grade of A and AXS's Value grade of C.
TPRE is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that TPRE is likely the superior value option right now.