Warren Buffett’s first investment foray into the insurance industry occurred with his purchase of National Indemnity Company in 1967, and his relationship with the sector has grown in spades over the years. In a recent article for Forbes, Validea CEO John Reese offers a brief history of the Oracle of Omaha’s trajectory and perspective on the insurance business and provides the following stocks that pass his guru-inspired screening models:
Verisk Analytics (VRSK) is a data analytics provider serving customers in insurance, natural resources, health care, financial services, government and risk management. The company scores well due to its solid, stable earnings base and healthy return-on-assets.
Amtrust Financial Services (AFSI), through its subsidiaries, provides specialty property and casualty insurance. The company earns high marks for its favorable price-earnings ratio, growth in earnings-per-share, healthy return-on-assets and predictable earnings-per-share.
Selective Insurance Group (SIGI) is a holding company for several insurance subsidiaries. The company’s market capitalization, consistent earnings-per-share growth and price-sales ratio satisfy our screening models, and the stock’s relative strength of 67 adds appeal.
AXA SA (AXAHY) is engaged in a range of insurance operations in the U.S. and internationally. Cash flow-per-share and shares outstanding both well exceed the market mean and earn high marks under our investment strategies.