Arch Capital Group Ltd. [ACGL] moved down -2.89: Why It’s Important

Arch Capital Group Ltd. [NASDAQ: ACGL] loss -2.89% or -1.0 points to close at $33.55 with a heavy trading volume of 2389650 shares. The company report on November 20, 2020 that AM Best Maintains Under Review With Negative Implications Status for Credit Ratings of Watford Re Ltd. and Its Subsidiaries.

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AM Best has maintained the under review with negative implications status for the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a-” of Watford Re Ltd. (Watford Re) (Bermuda) and its subsidiaries, Watford Insurance Company Europe Limited (WICE) (Gibraltar), Watford Insurance Company (WIC) (New Jersey) and Watford Specialty Insurance Company (WSIC) (New Jersey). In addition, AM Best has maintained the under review with negative implications status for the Long-Term ICR of “bbb-” and the Long-Term Issue Credit Rating of “bb” on the $225 million ($52 million outstanding) 8.5% cumulative preference shares of Watford Holdings Ltd. (Watford) (Bermuda) [NASDAQ: WTRE], the group’s ultimate holding company.

This Credit Rating (rating) action considers the recent announcement that Arch Capital Group Ltd. (Arch) [NASDAQ: ACGL] has revised its merger agreement with Watford to an all-cash offer of $35 per share. The revised offer is valued at approximately $700 million and represents a premium of approximately 96% to Watford’s unaffected closing common share price on Sept. 8, 2020, the last trading day prior to media reports about the possibility of a transaction between Watford and Arch. The rating action also considers Watford’s progress to date in limiting the group’s exposure to investment volatility through de-risking its investment portfolio, which incurred sizable losses during the first quarter of 2020.

It opened the trading session at $34.27, the shares rose to $34.27 and dropped to $33.305, the range by which the price of stock traded the whole day. The daily chart for ACGL points out that the company has recorded 18.89% gains over the past six months. However, it is still -60.3% lower than its most recent low trading price.

If we look at the average trading volume of 1.69M shares, ACGL reached to a volume of 2389650 in the most recent trading day, which is why market watchdogs consider the stock to be active.

Here is what top equities market gurus are saying about Arch Capital Group Ltd. [ACGL]:

Based on careful and fact-backed analyses by Wall Street experts, the current consensus on the target price for ACGL shares is $39.20 per share. Analysis on target price and performance of stocks is usually carefully studied by market experts, and the current Wall Street consensus on ACGL stock is a recommendation set at 2.20. This rating represents a strong Buy recommendation, on the scale from 1 to 5, where 5 would mean strong sell, 4 represents Sell, 3 is Hold, and 2 indicates Buy.

BofA/Merrill have made an estimate for Arch Capital Group Ltd. shares, keeping their opinion on the stock as Buy, with their previous recommendation back on May 22, 2020. The new note on the price target was released on January 06, 2020, representing the official price target for Arch Capital Group Ltd. stock. Previously, the target price had yet another drop from $44 to $40, while JP Morgan kept a Neutral rating on ACGL stock.

The Average True Range (ATR) for Arch Capital Group Ltd. is set at 1.25, with the Price to Sales ratio for ACGL stock in the period of the last 12 months amounting to 1.79. The Price to Book ratio for the last quarter was 1.16, with the Price to Cash per share for the same quarter was set at 2.34. Price to Free Cash Flow for ACGL in the course of the last twelve months was 4.99.

Trading performance analysis for ACGL stock

Arch Capital Group Ltd. [ACGL] fell into the red zone at the end of the last week, falling into a negative trend and dropping by -3.84. With this latest performance, ACGL shares gained by 14.86% in over the last four-week period, additionally plugging by 18.89% over the last 6 months – not to mention a drop of -20.27% in the past year of trading.

Overbought and oversold stocks can be easily traced with the Relative Strength Index (RSI), where an RSI result of over 70 would be overbought, and any rate below 30 would indicate oversold conditions. An RSI rate of 50 would represent a neutral market momentum. The current RSI for ACGL stock in for the last two-week period is set at 54.33, with the RSI for the last a single of trading hit 48.78, and the three-weeks RSI is set at 54.40 for Arch Capital Group Ltd. [ACGL]. The present Moving Average for the last 50 days of trading for this stock 31.38, while it was recorded at 34.19 for the last single week of trading, and 30.94 for the last 200 days.

Arch Capital Group Ltd. [ACGL]: A deeper dive into fundamental analysis

Operating Margin for any stock indicates how profitable investing would be, and Arch Capital Group Ltd. [ACGL] shares currently have an operating margin of +28.73. Arch Capital Group Ltd.’s Net Margin is presently recorded at +23.62.

Return on Total Capital for ACGL is now 14.50, given the latest momentum, and Return on Invested Capital for the company is 12.77. Return on Equity for this stock inclined to 15.63, with Return on Assets sitting at 5.40. When it comes to the capital structure of this company, Arch Capital Group Ltd. [ACGL] has a Total Debt to Total Equity ratio set at 21.80. Additionally, ACGL Total Debt to Total Capital is recorded at 17.90, with Total Debt to Total Assets ending up at 7.76. Long-Term Debt to Equity for the company is recorded at 23.39, with the Long-Term Debt to Total Capital now at 17.90.

Reflecting on the efficiency of the workforce at the company, Arch Capital Group Ltd. [ACGL] managed to generate an average of $380,539 per employee.

Arch Capital Group Ltd. [ACGL]: An earnings per share (EPS) analysis

With the latest financial reports released by the company, Arch Capital Group Ltd. posted 0.74/share EPS, while the average EPS was predicted by analysts to be reported at 0.68/share. When compared, the two values demonstrate that the company surpassed the estimates by a Surprise Factor of 8.80%. The progress of the company may be observed through the prism of EPS growth rate, while Wall Street analysts are focusing on predicting the 5-year EPS growth rate for ACGL. When it comes to the mentioned value, analysts are expecting to see the 5-year EPS growth rate for Arch Capital Group Ltd. go to 5.30%.

An analysis of insider ownership at Arch Capital Group Ltd. [ACGL]

There are presently around $10,881 million, or 89.70% of ACGL stock, in the hands of institutional investors. The top three institutional holders of ACGL stocks are: VANGUARD GROUP INC with ownership of 34,594,032, which is approximately -5.31% of the company’s market cap and around 2.93% of the total institutional ownership; ARTISAN PARTNERS LIMITED PARTNERSHIP, holding 32,013,642 shares of the stock with an approximate value of $1.07 billion in ACGL stocks shares; and BLACKROCK INC., currently with $807.86 million in ACGL stock with ownership of nearly -4.914% of the company’s market capitalization.

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Positions in Arch Capital Group Ltd. stocks held by institutional investors increased at the end of October and at the time of the October reporting period, where 178 institutional holders increased their position in Arch Capital Group Ltd. [NASDAQ:ACGL] by around 17,388,971 shares. Additionally, 175 investors decreased positions by around 14,590,151 shares, while 61 investors held positions by with 292,347,047 shares. The mentioned changes placed institutional holdings at 324,326,169 shares, according to the latest SEC report filing. ACGL stock had 38 new institutional investments in for a total of 3,101,908 shares, while 39 institutional investors sold positions of 1,006,452 shares during the same period.

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