SIGI
Selective Insurance Group, Inc.
$90.70
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 55.5% below fair value
You pay
$90.70
Bear
$143.89
Fair
$203.62
Bull
$203.62
Bear
$143.89
+58.6%
ROTCE 9.7% → 2.83x TBV
Fair
$203.62
+124.5%
ROTCE 13.0% → 4.00x TBV
Bull
$203.62
+124.5%
ROTCE 14.9% → 4.00x TBV
Key Value Driver
ROTCE (13.0%) vs. cost of equity (6.0%)
Implied Market Multiple
1.51x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $92.67 from 16 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $203.62 per share.
Warnings
Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.
Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.
Wall Street's average price target is $92.67 (from 16 analysts). Our estimate is 160% above the consensus -- consider that gap carefully.
Key Risks
- Book value quality matters as much as level — check loan loss reserves
- Interest rate sensitivity creates non-linear earnings surprises
- Insurance reserving is actuarial, not financial — errors emerge slowly