4-Star Stocks Poised to Pop: AXIS Capital

Based on the aggregated intelligence of 150,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, insurer AXIS Capital Holdings (NYSE: AXS  ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at AXIS' business and see what CAPS investors are saying about the stock right now.

AXIS facts

Headquarters (Founded)

Pembroke, Bermuda (2001)

Market Cap

$4.1 billion

Industry

Insurance

Trailing-12-Month Revenue

$2.8 billion

Management

CEO John Charman (since 2001)
CFO David Greenfield (since 2006)

Return on Equity (Average, Past 3 Years)

13.6%

Cash/Debt

$1 billion / $500 million

Dividend Yield

2.7%

Competitors

ACE (NYSE: ACE  )
AIG (NYSE: AIG  )
XL Capital (NYSE: XL  )

Other Highly Rated Insurance Stocks

Berkshire Hathaway (NYSE: BRK-A  ) (NYSE: BRK-B  )
Chubb (NYSE: CB  )

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 93% of the 121 members who have rated AXIS believe the stock will outperform the S&P 500 going forward. These bulls include All-Stars sentinelbrit and mrindependent, both of whom are ranked in the top 2% of our community.

Two weeks ago, Pogue1245 highlighted AXIS as an intriguing income opportunity:

Share price $29. Book value $37. Fwd [price-to-earnings ratio] 6x; Recent profit results beat consensus estimates. Yield 2.9% (dividend increased 5% and share buyback increased). Underlying business sound and on the whole growing. Stock price should move towards book value and [price-to-earnings ratio] should be at least 8x.

In a more recent pitch from last week, mrindependent elaborates. Here's an excerpt:

First and foremost, I like the company’s 2.74% dividend yield. ... In addition, I believe that [Axis] is likely to benefit from an ongoing boom cycle for insurance and reinsurance. ... Although the insurers began to recover in 2009, capital availability is still below average and premium rates are still high. Meanwhile, the stock market continues to accord low valuations to insurers. ... Thus we have a situation in which Axis Capital Holdings, a best in breed insurance company, is trading for 0.87 times book value. This low valuation is unjustified considering that [Axis] averaged a 12% ROE over the last 8 years.

What do you think about AXIS, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!  

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Berkshire is a choice of both Motley Fool Inside Value and Stock Advisor, and the Fool owns shares of it. The Fool's disclosure policy always gets a perfect score.


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