In a still-hot insurance market, a "hard market" in industry-speak, I continue to believe that Arch Capital (ACGL) is not only the best-run company out there, but still undervalued. While I don't typically cite share buybacks as proof of anything, given Arch's excellent historical track record with allocating capital, the fact that the company has been buying back shares at around 1.2x book when they're also underwriting seemingly all the business they can is a strong argument to me.
This hard market won't last, but Arch has always found ways to make money and do right by its shareholders, though it's not a year-in, year-out winner in the stock market. With the shares trading below my mid-$40's near-term fair value, I do think this is a name still worth considering at this level.
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