Is ACGL a high-quality business?

AlphaMadera's AlphaQuality grade scores Arch Capital Group Ltd. on six pillars — profitability, capital efficiency, balance-sheet strength, growth durability, cash generation, and shareholder yield. The composite letter grade reflects how ACGL compares to a Buffett-style quality bar.

What is Arch Capital Group Ltd.'s AlphaQuality grade?

AlphaQuality assigns a letter grade (A through F) to ACGL based on a six-pillar quantitative model. The live page shows the composite grade plus each pillar's individual score with the underlying metrics.

What makes ACGL a quality stock?

AlphaQuality looks at return on capital, free-cash-flow margins, debt-to-equity, revenue stability, dividend and buyback policy, and operating-margin trend. Stocks scoring well across all six pillars earn higher grades — the methodology favors compounders over cyclicals.

ACGL - Arch Capital Group Ltd.

Price: -- -- | CONSENSUS: Buy DETAILS | PRICE TARGET: $114.17 DETAILS

AlphaQuality

Quantitative six-pillar business-quality grade

Banks, Insurers & Asset Managers

AlphaQuality — archetype-weighted quantitative grade

B 70.0 / 100 composite

Composite Grade

Composite of six pillars weighted for banks, insurers & asset managers businesses. Purely quantitative — the six pillars score only reported financials, no analyst input.

Profitability

Weight: 25%

C 52.1

Scored using loss ratio — insurer-archetype substitution.

Loss Ratio 54.9% 80/100
Loss Ratio Trend +72.84 pp/yr 0/100

Capital Efficiency

Weight: 15%

A- 86.7

5yr Avg ROE 18.1% 87/100
5yr Share-Count CAGR -1.7% 85/100

Growth Quality

Weight: 10%

B 69.6

Scored using premium growth cross-checked against loss-ratio trend — insurer-archetype substitution.

5yr Premium CAGR 19.5% 99/100
Loss Ratio Trend (growth quality check) +72.84 pp/yr 0/100
Revenue-Growth Years (5) 5/5 100/100

Cash Generation

Weight: 15%

C+ 60.0

Scored using reserve development and loss-ratio stability — insurer-archetype substitution.

Reserve Development 3.5% 100/100
Loss Ratio Stability (σ) 12.45 0/100

Balance Sheet

Weight: 25%

A 90.1

Scored using premiums-to-surplus — insurer-archetype substitution.

Premiums / Surplus 0.70x 83/100
Interest Coverage (EBIT/Int) 34.86x 100/100

Stability

Weight: 10%

C 55.0

EPS Volatility (σ/μ) 0.81 7/100
Negative-Revenue Years (5) 0/5 100/100
Piotroski F-Score 8 89/100

3 of 3 gurus held; 1 added; 2 trimmed.

Holders: 3
Avg Δ position: +38.1%
New buys: 0
Full exits: 0

Greenblatt increased +126%
Dalio decreased -9%
Cooperman decreased -3%

How this is calculated

AlphaQuality grades six pillars from 0-100 and weights each by archetype:

Profitability (25%) — Loss Ratio, Loss Ratio Trend
Capital Efficiency (15%) — 5yr Avg ROE, 5yr Share-Count CAGR
Growth Quality (10%) — 5yr Premium CAGR, Loss Ratio Trend (growth quality check), Revenue-Growth Years (5)
Cash Generation (15%) — Reserve Development, Loss Ratio Stability (σ)
Balance Sheet (25%) — Premiums / Surplus, Interest Coverage (EBIT/Int)
Stability (10%) — EPS Volatility (σ/μ), Negative-Revenue Years (5), Piotroski F-Score

The six pillars read only reported financial-statement fields — no analyst targets or consensus ratings. The archetype that picks which pillar formulas apply is not fully price-free, though: it can route a company to the distressed/ungradable archetype based on price vs. its 52-week high, and beta affects one classification check. A minimum of 5 fiscal years of audited statements is required. Insurers and banks are graded on their own methodology — insurers on loss ratio, its trend and stability, and premiums-to-surplus; banks on the efficiency ratio, its trend and stability, and equity-to-assets — rather than on industrial margin/ROIC signals. Distressed, highly leveraged infrastructure, asset-manager, and other financial businesses are declared ungradable rather than forced into a numeric score.