December 7, 2023
Top 10 Stock Travelers Strong Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Travelers – Top 10 Stock in Dow Jones U.S. Insurance Index
Travelers is listed as a top 10 stock on December 07, 2023 in the market index D.J. US Insurance because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is negative and growth performance is below market average, both a sign for caution. Based on the Obermatt 360° View of 78 (top 78% performer), Obermatt assesses an overall strong buy recommendation for Travelers on December 07, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Property & Casualty Insurance |
| Index | Dow Jones, Diversity USA, D.J. US Insurance, S&P 500 |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Travelers Strong Buy
| 360 METRICS | December 7, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 52 |
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| GROWTH | ||||||||
| GROWTH | 11 |
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| SAFETY | ||||||||
| SAFETY | 70 |
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| SENTIMENT | ||||||||
| SENTIMENT | 38 |
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| 360° VIEW | ||||||||
| 360° VIEW | 78 |
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ANALYSIS: With an Obermatt 360° View of 78 (better than 78% compared with alternatives) for 2022, overall professional sentiment and financial characteristics for the stock Travelers are very positive. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Travelers. The consolidated Value Rank has an attractive rank of 52, which means that the share price of Travelers is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 52% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 70. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 38. Professional investors are more confident in 62% other stocks. The consolidated Growth Rank also has a low rank of 11, which means that the company is below average in terms of growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. 89 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 78, Travelers is better positioned than 78% of all alternative stock investment opportunities based on the Obermatt Method. The picture is mixed here. The stock seems to be a good value (Value Rank of 52), and the financing structure is on the safer side (Safety Rank of 70). However, sentiment in the professional investor community is below-average (Sentiment Rank of 38), as is the growth momentum for the company (Growth Rank of 11). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. Even though the financing structure is not as important as Value, Growth, and Sentiment, investors should still be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for Travelers only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 38 (better than 38% compared with alternatives), overall professional sentiment and engagement for the stock Travelers is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Travelers. Analyst Opinions are at a rank of 30 (worse than 70% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 37, which means that stock research experts are getting even more pessimistic. Other sentiment indicators are positive: The Professional Investors rank is 65, which means that professional investors hold more stock in this company than in 65% of alternative investment opportunities. So, pros tend to favor investing in this company. In addition, Market Pulse has a rank of 51, which means that the current professional news and professional social networks tend to be positive when discussing this company (more positive news than for 51% of competitors). While stock research analysts are getting ever more critical, many professional investors are committed to Travelers and the professional news channels are on the positive side. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 38 (less encouraging than 62% compared with investment alternatives), Travelers has a reputation among professional investors that is below that of its competitors. This is an ambiguous picture: analysts are negative and getting even more critical, while the news in the market is positive. Who should investors believe? This is a difficult question in such a situation. Investors should proceed cautiously and verify not only the financial performance in the Obermatt Value, Growth and Safety Ranks but also independent news coverage of the company. ...read more
Value Strategy: Travelers Stock Price Value better than average
ANALYSIS: With an Obermatt Value Rank of 52 (better than 52% compared with alternatives), Travelers shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Travelers. Price-to-Sales (P/S) is 58, which means that the stock price compared with what market professionals expect for future sales is lower than for 58% of comparable companies, indicating a good value concerning Travelers's revenue size. The same is valid for expected Price-to-Profits (or Price / Earnings, P/E), more favorable than for 67% of alternatives. It is also positive for expected dividend yields with a Dividend Yield rank of 56 (dividends are expected to be higher than 56% of other stocks). But, compared with other companies in the same industry, the Price-to-Book Capital ratio (also referred to as market-to-book ratio) is higher than average, making the stock more expensive. Only 56% of all competitors have an even higher price compared with book capital which puts the Price-to-Capital Rank for Travelers to 44. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 52, is a buy recommendation based on Travelers's stock price compared with the company's operational size and dividend yields. A low level of book capital means that the company has a business that is leaner in assets than its competitors. For instance, the company could be leasing its production facilities or be more focussed on intellectual property, such as its brand and software, which is less visible in its book capital. If that is the case, the three good value ranks for Sales, Profits, and Dividends are reliable indicators for the stock price value. ...read more
Growth Strategy: Travelers Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 11 (better than 11% compared with alternatives), Travelers shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below-average for Travelers. While Sales Growth ranks at 62, professionals currently expect the company to grow more than 62% of its competitors, while all other growth ranks are below the market median. Profit Growth has a rank of 19, which means that, currently, professionals expect the company to grow its profits less than 81% of its competitors, and Capital Growth has a low rank of 5. Historic stock returns were also below average with a current Stock Returns rank of 27 which means that the stock returns have recently been below 73% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 11, is a sell recommendation for growth and momentum investors. If revenues are expected to increase, but all other growth indicators are negative, the company may be investing in future growth through means not visible in the balance sheet and thus not reflected in capital growth. The fact that Stock Returns have been below market doesn't mean that much, as it may be due to overly optimistic investor behavior in the past, which has been corrected to a more reasonable level recently. If that were the case, a positive Value Rank would be a reason to invest because the company is still expected to grow, while stock prices are now at a more reasonable level. ...read more
Safety Strategy: Travelers Debt Financing Safety above-average
| SAFETY METRICS | December 7, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 61 |
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| REFINANCING | ||||||||
| REFINANCING | 0 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 80 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 70 |
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ANALYSIS: With an Obermatt Safety Rank of 70 (better than 70% compared with alternatives), the company Travelers has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Travelers is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for Travelers. Leverage is at a rank of 61, meaning the company has a below-average debt-to-equity ratio. It has less debt than 61% of its competitors. Liquidity is also good at a rank of 80, meaning the company generates more profit to service its debt than 80% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 0, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 100% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 70 (better than 70% compared with alternatives), Travelers has a financing structure that is safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Travelers. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more
Combined financial peformance: Travelers Top Financial Performance
| COMBINED PERFORMANCE | December 7, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 52 |
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| GROWTH | ||||||||
| GROWTH | 11 |
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| SAFETY | ||||||||
| SAFETY | 80 |
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| COMBINED | ||||||||
| COMBINED | 81 |
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ANALYSIS: With an Obermatt Combined Rank of 81 (better than 81% compared with investment alternatives), Travelers (Property & Casualty Insurance, USA) shares have much better financial characteristics than comparable stocks. Shares of Travelers are a good value (attractively priced) with a consolidated Value Rank of 52 (better than 52% of alternatives), are safely financed (Safety Rank of 70, which means low debt burdens), but show below-average growth (Growth Rank of 11). ...read more
RECOMMENDATION: A Combined Rank of 81, is a strong buy recommendation based on Travelers's financial characteristics. As the company Travelers's key financial metrics exhibit good value (Obermatt Value Rank of 52) but low growth (Obermatt Growth Rank of 11) while being safely financed (Obermatt Safety Rank of 70), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 52% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. ...read more
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