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Should Value Investors Buy RenaissanceRe (RNR) Stock?

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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.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company value investors might notice is RenaissanceRe (RNR - Free Report) . RNR is currently sporting a Zacks Rank of #1 (Strong Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 11.18. This compares to its industry's average Forward P/E of 27.68. Over the past 52 weeks, RNR's Forward P/E has been as high as 19.97 and as low as -14.39, with a median of 13.13.

Investors will also notice that RNR has a PEG ratio of 1.18. 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 industry currently sports an average PEG of 3.15. Over the last 12 months, RNR's PEG has been as high as 2.10 and as low as -1.51, with a median of 1.38.

Another notable valuation metric for RNR is its P/B ratio of 1.32. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.45. Over the past year, RNR's P/B has been as high as 1.41 and as low as 1.10, with a median of 1.29.

These figures are just a handful of the metrics value investors tend to look at, but they help show that RenaissanceRe is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, RNR feels like a great value stock at the moment.


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