Unmasking W. R. Berkley: The Overachiever You're Missing
Trefis
Let's just put it plainly: W. R. Berkley (NYSE: WRB) is one of the top-performing stocks you likely haven't noticed. While most investors are drawn to trendy names, WRB has consistently delivered 25% annualized returns over the past five years – significantly outpacing the S&P 500.
Here's what makes it stand out: it's attractively valued, highly profitable, and serves as a solid hedge during market turmoil. This stock not only generates strong returns, but also helps protect your portfolio during market downturns. Considering market cycles to safeguard capital is a key theme in our High-Quality portfolio, which has outperformed the S&P 500, generating returns of over 91% since inception.
Let's break down the data that strongly supports the case for WRB.
WRB isn't just a flash in the pan. The company has achieved 13% annual growth – not only in the last year, but over the past three years as well. With an operating margin of 17.5% and a free cash flow margin of 25%, alongside prudent underwriting and a sound financial strategy, WRB has built a solid foundation for continued success.
Perhaps WRB's most overlooked strength is its resilience during market downturns.
Here's how it performed when markets fell:
These results aren't random – they reflect a consistent pattern.
Despite its impressive track record, WRB remains modestly valued.
To put that into context: investors are paying double the valuation for similar cash flow metrics elsewhere. WRB's pricing reflects an opportunity that shouldn't be ignored.
That said, individual stock investing carries risks, and WRB is no exception. It saw a nearly 25% decline from November 2022 to June 2023, significantly lagging during a strong 2024 market. To mitigate such stock-specific risk while maintaining upside potential, consider our High Quality Portfolio. Featuring 30 stocks, it has consistently outperformed the S&P 500 over the past four years. Why? Because collectively, HQ Portfolio stocks offer better returns with lower risk compared to the index, as reflected in HQ Portfolio performance metrics.
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