SIGI
Selective Insurance Group, Inc.
$96.08
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 53.1% below fair value
You pay
$96.08
Bear
$146.29
Fair
$204.82
Bull
$204.82
Bear
$146.29
+52.3%
ROTCE 9.7% → 2.86x TBV
Fair
$204.82
+113.2%
ROTCE 13.0% → 4.00x TBV
Bull
$204.82
+113.2%
ROTCE 14.9% → 4.00x TBV
Key Value Driver
ROTCE (13.0%) vs. cost of equity (6.0%)
Implied Market Multiple
1.6x
Summary
Our base-case estimate uses P/Tangible Book × ROE Quality. We then blend that result with the average analyst price target of $97.50 from 16 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $204.82 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 $97.50 (from 16 analysts). Our estimate is 147% 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