Why Is Selective Insurance (SIGI) Up 6.9{5667a53774e7bc9e4190cccc01624aae270829869c681dac1da167613dca7d05} Since Last Earnings Report?

William Arsn

It has been about a month since the last earnings report for Selective Insurance (SIGI). Shares have added about 6.9{5667a53774e7bc9e4190cccc01624aae270829869c681dac1da167613dca7d05} in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Selective Insurance due for a pullback? Before we dive into how investors and analysts have reacted as of late, let’s take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Behind the Headlines

Segmental Results

Financial Update

Selective Insurance exited the second quarter with total assets of $9.3 billion, which was 6{5667a53774e7bc9e4190cccc01624aae270829869c681dac1da167613dca7d05} above the level at December 2019 end. As of Jun 30, 2020, book value per share was $38.43, up 4.1{5667a53774e7bc9e4190cccc01624aae270829869c681dac1da167613dca7d05} from the level as of 2019 end. Annualized operating return on equity was 6.2{5667a53774e7bc9e4190cccc01624aae270829869c681dac1da167613dca7d05} in the quarter under review, down 830 basis points year over year.

2020 Guidance

Story continues

It turns out, estimates revision flatlined during the past month. The consensus estimate has shifted 7.51{5667a53774e7bc9e4190cccc01624aae270829869c681dac1da167613dca7d05} due to these changes.

At this time, Selective Insurance has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the top 40{5667a53774e7bc9e4190cccc01624aae270829869c681dac1da167613dca7d05} for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren’t focused on one strategy, this score is the one you should be interested in.

Selective Insurance has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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