ACE Ltd (ACE): Today's Featured Insurance Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

ACE ( ACE) pushed the Insurance industry lower today making it today's featured Insurance laggard. The industry as a whole closed the day down 1.3%. By the end of trading, ACE fell 77 cents (-1%) to $76.10 on average volume. Throughout the day, 1.2 million shares of ACE exchanged hands as compared to its average daily volume of 1.6 million shares. The stock ranged in price between $75.95-$77.20 after having opened the day at $76.76 as compared to the previous trading day's close of $76.87. Other companies within the Insurance industry that declined today were: Life Partners Holdings ( LPHI), down 7.7%, Radian Group ( RDN), down 7.4%, Phoenix Companies ( PNX), down 4.7%, and Homeowners Choice ( HCI), down 4.6%.
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ACE Limited, through its subsidiaries, provides a range of insurance and reinsurance products to insureds worldwide. ACE has a market cap of $26.35 billion and is part of the financial sector. The company has a P/E ratio of 7.8, below the S&P 500 P/E ratio of 17.7. Shares are up 9.6% year to date as of the close of trading on Tuesday. Currently there are 17 analysts that rate ACE a buy, no analysts rate it a sell, and three rate it a hold.

TheStreet Ratings rates ACE as a buy. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in stock price during the past year and attractive valuation levels. We feel these strengths outweigh the fact that the company shows low profit margins.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the insurance industry could consider KBW Insurance ETF ( KIE) while those bearish on the insurance industry could consider Proshares Short Financials ( SEF).

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