General de Seguros SAB: Strong price momentum but will it sustain?

General de Seguros SAB relative valuation is OVERVALUED and it has a fundamental analysis score of 50.

Our analysis is based on comparing General de Seguros SAB with the following peers – Argus Group Holdings Limited, Sul America SA Ctf de Deposito de Acoes Cons of 1 Sh + 2 Pfd Shs, Pena Verde SAB and Grupo Profuturo SAB de CV (AGH-BM, SULA11-BR, PV-MX and GPROFUT-MX).

General de Seguros SAB has shown good performance overall, both over the last one year (at 20%) as well as over the last month (at 13.79%). Share price performance over the last month, though has been lower than that over the last year. But General de Seguros SAB’s stock has done better than its overall peer group whose performance was 1.43% over the last month.

Company Snapshot

  • From a peer analysis perspective, relative outperformance last month is up from a median performance last year.
  • It’s current Price/Book of 1.00 is about median in its peer group.
  • The market expects GENSEG-MX to grow at about the same rate as the peers and to maintain the median returns it currently generates.
  • GENSEG-MX‘s relatively high profit margins are burdened by capital inefficiency.
  • Changes in annual earnings are in line with its chosen peers but lags in terms of revenue, implying the company is cost conscious and selective about spending for growth.
  • GENSEG-MX‘s return on equity currently and over the past five years is around the peer median and suggest that it does not have any particular operational advantages versus peers.
  • While the company does not seem to have a relative advantage in its underwiting margins, its relatively high pre-tax margin suggests relatively tight control on operating costs versus peers.
  • While GENSEG-MX‘s revenues in recent years have grown faster than the peer median, the market gives the stock a P/E ratio that is around peer median suggesting that the market has some questions about the company’s long-term strategy.
  • The company’s equity capital investment program suggests it is under-investing in a business that is producing peer median returns.
  • Our analysis rates General de Seguros SAB as OVERVALUED relative to its peers.

Share Price Performance

From a peer analysis perspective, relative outperformance last month is up from a median performance last year.

While GENSEG-MX‘s change in share price of 20% for the last 12 months is in line with its peer median, its more recent 30-day share price performance of 13.79% is above the peer median. This suggests the company’s performance has improved more recently relative to peers.

Share Price Performance

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Leading, Fading, Lagging, Rising

Relative Valuation

Relative Valuation
Fundamental Score

General de Seguros SAB’s price of MXN 66 is greater than CapitalCube’s implied price of MXN 55.37. At this level, CapitalCube believes that General de Seguros SAB is overvalued. Over the last 52 week period, the stock has fluctuated between MXN 45 and MXN 66.

Valuation & Peer Metrics

A complete list of valuation metrics is available on the company page.

Company Profile

General de Seguros SAB engages in the provision of insurance and reinsurance services. It offers life, health, car and house insurance. The company was founded on October 10, 1945 and is headquartered in Mexico City.

Disclaimer

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