Seeking Alpha: Arch Capital Seldom Looks Cheap, But Mortgage Insurance Should Spur Growth

I've never made any secrets of the respect I have for Arch Capital (ACGL) management. Many company executives talk about the importance of creating shareholder value and making decisions to maximize value, but it is my opinion that Arch Capital lives up to that to a much higher degree than most other companies. When the management sees attractive return-generating opportunities, they deploy capital. When management does not see those opportunities, they conserve and/or return capital.

Investors had a rare opportunity to acquire Arch Capital shares at attractive valuations, but only when it seemed like the U.S. financial system was melting down. Since then, the shares have regained their luster and their high-end multiples. I do believe that Arch Capital's foray into mortgage insurance will prove a good move, and quality companies have a knack for exceeding long-term expectations (and price targets), but the short-term opportunity is not to compelling.

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Arch Capital Seldom Looks Cheap, But Mortgage Insurance Should Spur Growth