Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, property and casualty insurer Aspen Insurance Holdings (NYSE: AHL ) has earned a coveted five-star ranking.
With that in mind, let's take a closer look at Aspen's business and see what CAPS investors are saying about the stock right now.
|Headquarters (Founded)||Hamilton, Bermuda (2002)|
|Market Cap||$2.4 billion|
|Industry||Property and casualty insurance|
|Trailing-12-Month Revenue||$2.16 billion|
|Management||CEO Christopher O'Kane (since 2002)
CFO Richard Houghton (since 2007)
|Return on Equity (Average, Past 3 Years)||11%|
|Cash / Debt||$1.4 billion / $249.6 million|
|Competitors||AIG (NYSE: AIG )
Markel (NYSE: MKL )
XL Group (NYSE: XL )
ACE (NYSE: ACE )
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 97% of the 310 members who have rated Aspen believe the stock will outperform the S&P 500 going forward. These bulls include SorgelEquity and All-Star TMFDeej, who is ranked in the top 1% of our community.
Earlier this year, SorgelEquity brought Aspen's cheapish ratios, which still apply today, to our community's attention: "Very low P/CF ratio, revenue stream is geographically diverse, and it is trading at a significant discount to book value."
Aspen's bargain-like valuation continues to fuel its five-star CAPS status. Currently, Aspen's price-to-book (0.7) is down there with close rival XL's (0.7), and below that of other insurance foes like AIG (1.6), Markel (1.2), ACE (1.0), and White Mountains (NYSE: WTM ) (0.8). Of course, when you consider Aspen's history of double-digit book value growth, that discount seems even tastier.
CAPS All-Star TMFDeej explains:
The stock is currently trading at around a 20% discount to its book value, despite the fact that it has only reported a loss in one year since it went public in 2003 (the Katrina year). That loss likely will not be repeated given the fact that the company has reduced its natural catastrophe exposure by about half since then.
Since its IPO, Aspen has grown its book value by an average of 12.7% per year, which is an impressive feat considering the fact that we have been in a weak insurance market since 2006.
I think that Aspen stands a good chance of outperforming the S&P 500 over the next several years given the current market conditions. If insurance premiums begin to improve or if interest rates rise, the stock could really take off.
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