SIGI
Selective Insurance Group, Inc.
$86.21
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Strong
·
Conviction
Undervalued
Trading 64.3% below fair value
You pay
$86.21
Bear
$172.62
Fair
$241.69
Bull
$241.69
Bear
$172.62
+100.2%
ROTCE 9.7% → 2.86x TBV
Fair
$241.69
+180.3%
ROTCE 13.0% → 4.00x TBV
Bull
$241.69
+180.3%
ROTCE 14.9% → 4.00x TBV
Adjust Assumptions
13.0%
6.0%
Key Value Driver
ROTCE (13.0%) vs. cost of equity (6.0%)
Implied Market Multiple
1.43x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (16 analysts)
$100.80
Divergence from AlphaVal
140%
Summary
With ROTCE of 13.0% vs. 6.0% cost of equity, fair P/TBV is 4.00x on $60.42 tangible book, implying $241.69 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 $100.80 (from 16 analysts). Our estimate is 140% 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