Yahoo Finance Is Now The Time To Bet On The Financial Sector And Hastings Group Holdings plc (LON:HSTG)?
Hastings Group Holdings plc (LSE:HSTG), a UK£1.71B mid-cap, is an insurance company operating in an industry, which has recently experienced the impact of a softening commercial lines market and a low-yield investment climate. Financial services analysts are forecasting for the entire industry, a positive double-digit growth of 20.24% in the upcoming year , and an enormous growth of 55.46% over the next couple of years. This rate is larger than the growth rate of the UK stock market as a whole. Today, I’ll take you through the sector growth expectations, as well as evaluate whether Hastings Group Holdings is lagging or leading in the industry. See our latest analysis for Hastings Group Holdings
What’s the catalyst for Hastings Group Holdings’s sector growth?
Amid challenges from regulatory disruption, increasing consumer expectations and sluggish sales, insurers will increasingly consider technology integration to drive growth and efficiency. In the previous year, the industry saw growth in the thirties, beating the UK market growth of 18.56%. Hastings Group Holdings leads the pack with its impressive earnings growth of 61.63% over the past year. However, analysts are not expecting this industry-beating trend to continue, with future growth expected to be 7.72% compared to the wider insurance sector growth hovering in the twenties next year.
Is Hastings Group Holdings and the sector relatively cheap?
The insurance industry is trading at a PE ratio of 16.43x, relatively similar to the rest of the UK stock market PE of 17.43x. This means the industry, on average, is fairly valued compared to the wider market – minimal expected gains and losses from mispricing here. Furthermore, the industry returned a similar 12.19% on equities compared to the market’s 12.41%. On the stock-level, Hastings Group Holdings is trading at a PE ratio of 13.49x, which is relatively in-line with the average insurance stock. In terms of returns, Hastings Group Holdings generated 20.67% in the past year, which is 8.49% over the insurance sector.
Next Steps:
If Hastings Group Holdings has been on your watchlist for a while, now may not be the best time to enter into the stock. The company is an insurance industry laggard in terms of its future growth outlook, and is trading relatively in-line with its peers. If growth and mispricing are important aspects for your investment thesis, there may be better investments in the financial sector. However, before you make a decision on the stock, I suggest you look at Hastings Group Holdings’s fundamentals in order to build a holistic investment thesis.
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Historical Track Record: What has HSTG’s performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Hastings Group Holdings? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
