The Travelers Remains Undervalued

The view in August argued that The Travelers TRV, which I first wrote about on April 24, 2009, at a price of $30.50, was undervalued. That proved to be on the mark, as the stock rose out of a base near $50 to trade above $57 this fall. However, the good news is that The Travelers pulled back a few bucks in November, creating still another opportunity risk-tolerant investors to establish a position in a quality insurer and earn an outsized gain. The Travelers should approach $70 by mid-2011, boosted by 2% to 4% premium revenue growth, as the insurance company takes advantage of new business opportunities. Prudent underwriting, a superior balance sheet and a $1.44 annual dividend add to the positive mix. Continue reading the article.