Travelers’ stock (NYSE: TRV) has lost 13% YTD, as compared to the 16% rise in the S&P500 index over the same period. Further, it is currently trading at around $163 per share, which is 15% below its fair value of $193 – Trefis’ estimate for Travelers’ valuation.
Interestingly, Travelers stock had a Sharpe Ratio of 0.3 since early 2017, which is lower than 0.6 for the S&P 500 Index over the same period. This compares with the Sharpe of 1.28 for the Trefis Reinforced Value portfolio. Sharpe is a measure of return per unit of risk, and high-performance portfolios can provide the best of both worlds.
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