White Mountains Insurance Group Investment and Valuation Analysis

White Mountains Insurance Group is a holding company that has made significant investments in various businesses.

It has a diverse portfolio of investments, including insurance companies, technology firms, and real estate ventures.

The company has a strong track record of identifying and investing in promising businesses, often taking a minority stake to allow the underlying business to operate independently.

White Mountains has a disciplined approach to investing, focusing on businesses with strong fundamentals and growth potential.

White Mountains Insurance Group has reported strong financial performance in recent quarters. The company's operating cash flow of $547.20M allows it to safely service its debt of $544.90M.

WTM's profit margin has seen a significant increase, rising from 14.1% to 24.7% in the past year. This improvement in profitability is a positive sign for the company's financial health.

In the last year, White Mountains Insurance Group's EPS shot from US$98.07 to US$252, representing a year-on-year growth of 157%. This impressive growth rate is a testament to the company's strong financial performance.

Here are some key financial highlights from the company's recent results:

White Mountains Insurance Group's earnings per share (EPS) have been growing at an incredible pace. The company's EPS shot from US$98.07 to US$252 over the last year, a growth rate of 157%.

This is a significant increase, and it's natural to wonder if this is a sign of the company reaching an inflection point. To put this growth into perspective, a 157% year-on-year growth rate is not often seen in the business world.

Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. White Mountains Insurance Group's EBIT margins have grown from 24% to 37% in the last 12 months.

This is a notable improvement, and it suggests that the company's profits are becoming more stable and sustainable. However, it's essential to remember that a weak balance sheet could come back to bite the company.

Let's take a closer look at the financial performance of White Mountains Insurance Group compared to the S&P. The company has seen some impressive returns over the years.

In the past year, White Mountains Insurance Group's stock price has increased by +24.40%, outpacing the S&P's +21.79% gain.

Over the past five years, White Mountains Insurance Group's stock price has risen by +73.38%, while the S&P has seen a +82.82% increase. However, if we look at the annualized return over the past five years, White Mountains Insurance Group's +11.62% is actually lower than the S&P's +12.82%.

The real standout, though, is the company's performance since its IPO. White Mountains Insurance Group's stock price has increased by +10,777%, a staggering figure that far surpasses the S&P's +3,117% gain.

Here's a quick comparison of the two companies' returns:

In the second quarter of 2024, White Mountains Insurance Group reported a 1% decrease in adjusted book value per share (ABVPS) to $1,777. Despite this, ABVPS saw a 4% increase in the first half of 2024, including dividends.

Ark posted a 89% combined ratio with $697M in gross written premiums, a 15% year-over-year (YoY) rise. BAM generated $28M in gross written premiums, up 7% YoY.

MediaAlpha's share price dropped 35%, leading to a $139M loss. White Mountains' comprehensive income for Q2 2024 was $(55)M, influenced by investment losses in MediaAlpha.

The company holds $650M in undeployed capital.

To invest in White Mountains Insurance Group stock, you'll want to follow these simple steps.

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You'll also need to put funds into your brokerage account, choosing your method of payment and adding your information.

Research White Mountains Insurance Group stock thoroughly, using tools like our stock analysis website to evaluate its underlying business fundamentals, and consider the opinions of top analysts.

Make your purchase of White Mountains Insurance Group stock at the current market price or use a limit order to buy at a specific price.

Finally, keep tabs on your position in White Mountains Insurance Group shares by creating a watchlist to monitor your investment.

Here are the 6 steps to buy White Mountains Insurance Group stock:

White Mountains Insurance Group's P/E ratio of 7.85x is lower than the Insurance - Property & Casualty industry average, which could indicate that the stock is undervalued.

WTM's P/B ratio of 1.1x is also lower than the industry average, suggesting that the stock may be undervalued.

WTM's PEG ratio of 0.37x is lower than the industry average, which could indicate that the stock is undervalued.

Here are some key metrics to consider:

WTM's earnings have increased by 29% per year over the past five years, which is faster than the Insurance - Property & Casualty industry average of 23.31%.

WTM's revenue has also increased by 29.32% per year over the past five years, which is faster than the industry average of 12.66%.

Insiders at White Mountains Insurance Group own a significant amount of capital, worth US$152m, which aligns their best interests with the wider shareholder group.

This level of insider commitment is quite encouraging, as it ensures that the leaders of the company would experience their success or failure with the stock.

Liam P. Caffrey, President CFO of WTM, was the latest insider to sell WTM stock, unloading $816,925.20 worth of shares on January 1, 2025.

Over the last year, insiders at WTM have sold more shares than they have bought.

This trend of insider selling may raise some concerns, but it's essential to consider the broader context of their ownership stake and commitment to the company.

White Mountains Insurance Group's valuation is complex, but it's worth taking a closer look. The company's P/E ratio of 7.85x is significantly lower than the Insurance - Property & Casualty industry average of 13.67x, suggesting it may be undervalued.

Using relative valuations ratios, we can see that WTM's P/B ratio of 1.1x is also lower than the industry average of 2.22x, indicating potential undervaluation. Additionally, the PEG ratio of 0.37x suggests WTM may be undervalued.

The company pays a dividend of 0.05%, which is much lower than the Insurance - Property & Casualty industry's average dividend yield of 2.56%. If you owned $1,000 of WTM stock, you would have been paid $0.50 in the past 12 months.

WTM's dividend payments have not consistently grown over the past decade, but have remained stable. However, the company's earnings and revenue have been increasing at a faster rate than the industry average, with a 29% annual growth in earnings and revenue over the past five years.

Here's a summary of WTM's valuation and income metrics: