Arch Capital (ACGL) Navigates Market Cycles with Strength, Offering Investors Long-Term Value

Arch Capital Group Ltd. (NASDAQ:ACGL) is one of the best affordable long term stocks to buy according to hedge funds. On January 16, Citizens analyst Matthew Carletti reaffirmed his Market Outperform rating on Arch Capital Group Ltd. (NASDAQ:ACGL) and kept a price target of $125 for the stock. Carletti cited Arch Capital’s “very strong balance sheet” as a key reason for the positive view.

The analyst said that Arch Capital is superb at managing through the cycle; that is, the company has shown resilience through different market conditions. Carletti also pointed out that this resilience will continue because the company is leaning into casualty and moderating property, which he said is a better fit for Arch Capital’s business model.

While at it, Carletti recommended that investors focus on companies with strong balance sheets. This is because persistent casualty loss cost inflation will likely continue to cause investor concerns about some companies’ casualty loss reserves, the analyst said. He specifically suggested looking at companies with earnings streams tied to both underwriting results and investment income.

Carletti stated that companies with longer-duration portfolios will benefit longer from recent interest rate rises if rates decline. He included Arch Capital among those it views as benefiting under that scenario.

Arch Capital Group Ltd. (NASDAQ:ACGL) is a Bermuda-based insurance and reinsurance company. It provides property, casualty, and mortgage insurance solutions worldwide. The firm operates through three main segments: Insurance, Reinsurance, and Mortgage, with a strong presence in the US, Europe, and Bermuda.

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Disclosure: None. This article is originally published at Insider Monkey.