Investment, Coding and Actuary

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Picking my first stock

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I couldn’t recall the last time I look forwarded to Monday as much.

Monday is coming and the money start rolling! After register for an app called StockWars, I am ready to buy in my first virtual stock.

I decided to started with the area that I have most familiar with: insurance industry. Although many successful insurance companies are not public companies (in fact, a lot are private/mutual companies), there are a number of possible picks. With a focus on Property/Casualty side, I have my eyes on Traveler (TRV).

With a very informative reading on Wall Street Cheatsheet, I start with looking at the fundamental of the business itself. According to Investor Relations page of Travelers,

The Travelers Companies, Inc. (NYSE: TRV) is a leading provider of property casualty insurance for auto, home and business. The company’s diverse business lines offer its global customers a wide range of coverage sold primarily through independent agents and brokers. A component of the Dow Jones Industrial Average, Travelers has more than 30,000 employees and operations in the United States and selected international markets. The company generated revenues of approximately $26 billion in 2012.

The financial rating of Travelers is strong.

Now move over to stock price trend.

TRV Technical Analysis   The Travelers Companies  Inc. C Stock   Yahoo  Finance

The company went through ebb and flow even during the GFC and has grown strong since then. The only significant dip in stock price came about the time of Sandy but the price quickly recovered after that. The price is moving above the moving average, meaning the price is now resilient to minor shock in the market.


The graph above paints the similar picture: very good outlook in the near term.

TRV Ratios

From the top 3 ratios, comparing to the industry, the price of Travelers is not overpriced at the moment. The Rev growth is slow but it is to be expected for a matured company like this.

For an insurance company, the Earned Premiums is a very important measure of its competitiveness in the market. The earned premiums of Travelers have been growing steadily in the past 5 years as a result of competitiveness among its peers.

The final tentative verdict for Travelers is a BUY, according to the picture it represents.


Author: jam3sch3n

An actuarial student with a keen interest in investment and coding.

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