Why Arch Capital Group Ltd. (NASDAQ:ACGL) Could Have A Place In Your Portfolio

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Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on Arch Capital Group Ltd. (NASDAQ:ACGL) due to its excellent fundamentals in more than one area. ACGL is a company with great financial health as well as a a strong track record of performance. Below is a brief commentary on these key aspects. If you’re interested in understanding beyond my broad commentary, read the full report on Arch Capital Group here.

Proven track record with adequate balance sheet

ACGL delivered a bottom-line expansion of 86% in the prior year, with its most recent earnings level surpassing its average level over the last five years. Not only did ACGL outperformed its past performance, its growth also exceeded the Insurance industry expansion, which generated a 22% earnings growth. This paints a buoyant picture for the company. ACGL’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This indicates that ACGL has sufficient cash flows and proper cash management in place, which is a key determinant of the company’s health. ACGL’s has produced operating cash levels of 0.45x total debt over the past year, which implies that ACGL’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.

NASDAQGS:ACGL Income Statement Export February 8th 19

Next Steps:

For Arch Capital Group, there are three relevant factors you should further examine:

1. Future Outlook: What are well-informed industry analysts predicting for ACGL’s future growth? Take a look at our free research report of analyst consensus for ACGL’s outlook.

2. Valuation: What is ACGL worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether ACGL is currently mispriced by the market.

3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of ACGL? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.