Value
10.0/10data confidence 40%| Component | Sub-score |
|---|---|
| P/E | 10.0 |
| EV/EBITDA | 10.0 |
- ▸Attractively valued
ACGLO · Why this verdict
Why Arch Capital Group Ltd. - Depos (ACGLO) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictHOLD
Overall score5.4/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
The Arch Capital depositary shares offer a 7.6% dividend and very cheap valuation backed by an insurer with 23% margins, but revenue is declining 9% and the shares are in a downtrend below their 200-day average. Holding for income makes sense; adding on weak momentum does not.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The shares pay a 7.6% dividend with a dividend safety component of 7.7 out of 10, which supports an income-driven holding. Catalyst breakdown | The dividend is maintained at about 7.6% of price through the next 12 months. | →Stable |
| CounterA 7.6% yield on a depositary share may reflect fixed-rate preferred terms whose price is capped, so income is the only return. | ||
The shares are attractively valued, with both P/E and EV/EBITDA scoring 10 out of 10, and an attractive P/E versus peers. Valuation breakdown | The valuation score stays at or above 8 out of 10. | →Stable |
| CounterValuation confidence is only 0.4, so the score rests on thin data and may overstate how cheap the shares really are. | ||
The issuer earns strong margins of 23% with operating and net margin scores of 10 out of 10 and a Piotroski F-Score score of 6.7. Quality breakdown | Margins stay above 20% for the next four quarters. | →Stable |
| CounterROE scores only 6.2 and gross margin 3.5, so profitability is not outsized relative to equity employed. | ||
Revenue is declining 9% and growth scores 0.1 out of 10, which caps the case for price appreciation. Growth breakdown | Revenue growth returns to at least 0% year over year. | ↓Deteriorating |
| CounterFor a preferred-style security, growth matters less than coverage of the fixed payment, so weak growth may not hurt the income case. | ||
Momentum is weak at 2.9 out of 10, with falling on-balance volume and a price below the 200-day average, which signals distribution. Momentum breakdown | The price reclaims its 200-day average and on-balance volume stops falling. | ↓Deteriorating |
| CounterWith price near the resistance-based target of $18.37 and the 200-day slope flat, the downtrend may be shallow and temporary. | ||
The shares pay a 7.6% dividend with a dividend safety component of 7.7 out of 10, which supports an income-driven holding.
→StableCatalyst breakdown
- Expectation
- The dividend is maintained at about 7.6% of price through the next 12 months.
CounterA 7.6% yield on a depositary share may reflect fixed-rate preferred terms whose price is capped, so income is the only return.
The shares are attractively valued, with both P/E and EV/EBITDA scoring 10 out of 10, and an attractive P/E versus peers.
→StableValuation breakdown
- Expectation
- The valuation score stays at or above 8 out of 10.
CounterValuation confidence is only 0.4, so the score rests on thin data and may overstate how cheap the shares really are.
The issuer earns strong margins of 23% with operating and net margin scores of 10 out of 10 and a Piotroski F-Score score of 6.7.
→StableQuality breakdown
- Expectation
- Margins stay above 20% for the next four quarters.
CounterROE scores only 6.2 and gross margin 3.5, so profitability is not outsized relative to equity employed.
Revenue is declining 9% and growth scores 0.1 out of 10, which caps the case for price appreciation.
↓DeterioratingGrowth breakdown
- Expectation
- Revenue growth returns to at least 0% year over year.
CounterFor a preferred-style security, growth matters less than coverage of the fixed payment, so weak growth may not hurt the income case.
Momentum is weak at 2.9 out of 10, with falling on-balance volume and a price below the 200-day average, which signals distribution.
↓DeterioratingMomentum breakdown
- Expectation
- The price reclaims its 200-day average and on-balance volume stops falling.
CounterWith price near the resistance-based target of $18.37 and the 200-day slope flat, the downtrend may be shallow and temporary.
Per-dimension breakdown
Quality
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 6.2 |
| ROA | 2.6 |
| Gross margin | 3.5 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 2.2 |
| FCF quality | 7.5 |
| Moat | 5.9 |
| Piotroski F | 6.7 |
- ▸Strong margins: 23%
Growth
0.1/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 0.3 |
| EPS growth | 0.0 |
- ▸Declining revenue: -9%
Momentum
2.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.0 |
| MACD | 3.4 |
| OBV | 1.9 |
| MA position | 1.5 |
| Volume | 2.2 |
- ▸Capitulation risk (RSI 29, below 200MA)
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA, MA slope flat
Sentiment
4.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| erm sentiment | 4.6 |
Insider
5.0/10data confidence 50%Peer rank
5.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 9.2 |
| quality rank | 7.1 |
| growth rank | 0.0 |
- ▸Attractive P/E vs peers
Technical
8.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.1 |
| support resistance | 9.3 |
| 52w position | 7.3 |
Risk (lower is worse)
8.8/10data confidence 80%| Component | Sub-score |
|---|---|
| days to cover | 7.8 |
| volatility | 7.9 |
| beta | 10.0 |
| debt equity | 9.3 |
Catalyst
6.3/10data confidence 50%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| dividend safety | 7.7 |
- ▸Dividend: 7.6%
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (5)
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:NO_DATE
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:2.4<4.5
- DEATH_CROSS:HARD_BLOCK
Warning (2)
- ASYMMETRY:UPSIDE_EXHAUSTED (upside=0.0%)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
0.00
Upside
+3.0%
Downside
5.0%
Sizing output
AVOID
SetupFalling Knife — Death cross, below all MAs, RSI 29, MACD bearish
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: INSIDER:OK. Top dim: Value at 10.0; weakest: Growth at 0.1. No conviction either direction.
The strongest dimensions are Value at 10.0, Risk (lower is worse) at 8.8, and Technical at 8.2; the weakest are Growth at 0.1, Momentum at 2.4, and Sentiment at 4.8. The V9 engine flagged 2 failed gates with 2 warnings, producing an asymmetric reward-to-risk of 0.00 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1High Dividend Income
Trip ifDividend yield falls below 6% or the dividend is cut by more than 10%.
- P2Attractive Peer Relative Valuation
Trip ifThe value score falls below 6 out of 10 from the current 10.0.
- P3Strong Underlying Margins
Trip ifNet margin falls below 15% from the current 23%.
- P4Declining Revenue Weak Growth
Trip ifRevenue decline exceeds 15% year over year from the current -9%.
- P5Negative Price Momentum Downtrend
Trip ifPrice falls to $17.23 or below, from the current $17.82.