3 Reasons BOW Has Explosive Upside Potential

BOW Cover Image

Bowhead Specialty’s stock price has taken a beating over the past six months, shedding 22.8% of its value and falling to $21.44 per share. This might have investors contemplating their next move.

Following the pullback, is this a buying opportunity for BOW? Find out in our full research report, it’s free.

Why Is BOW a Good Business?

Named after the Arctic bowhead whale known for navigating challenging waters, Bowhead Specialty Holdings (NYSE: BOW) is a specialty insurance company that provides customized coverage for complex and high-risk commercial sectors.

1. Net Premiums Earned Skyrocket, Fueling Growth Opportunities

Net premiums earned are net of what’s paid to reinsurers (insurance for insurance companies), which are used by insurers to protect themselves from large losses.

Bowhead Specialty’s net premiums earned has grown at a 36.5% annualized rate over the last two years, much better than the broader insurance industry.

Bowhead Specialty Trailing 12-Month Net Premiums Earned

2. Outstanding Long-Term EPS Growth

We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.

Bowhead Specialty’s EPS grew at an astounding 28.9% compounded annual growth rate over the last three years. This performance was better than most insurance businesses.

Bowhead Specialty Trailing 12-Month EPS (GAAP)

3. Growing BVPS Reflects Strong Asset Base

In the insurance industry, book value per share (BVPS) provides a clear picture of shareholder value, as it represents the total equity backing a company’s insurance operations and growth initiatives.

Fortunately for investors, Bowhead Specialty’s BVPS grew at an incredible 30.9% annual clip over the last two years.

Bowhead Specialty Quarterly Book Value per Share

Final Judgment

These are just a few reasons why Bowhead Specialty is one of the best insurance companies out there. After the recent drawdown, the stock trades at 1.4× forward P/B (or $21.44 per share). Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.

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