We recently published a list of 16 Best 52-Week Low Stocks To Buy Now According to Short Sellers. In this article, we are going to take a look at where Selective Insurance Group, Inc. (NASDAQ:SIGI) stands against the other 52-week low stocks.
The US stock market reached new all-time highs in late February 2025, as inflation remained near the 2% target while a potential end in the Ukraine conflict sparked some optimism for the long term. Besides the creation of multi-billion-dollar demand for potential rebuilding efforts of the country, including agriculture, residential, and infrastructure, the return of American business to Ukraine and Russia is a big win for most corporations, many of which could experience up to double-digit uplift in revenue and earnings growth due to up to 200 million customer market. More importantly, this outlook is favorable for energy security, stimulates volumes, and might push energy prices lower, which in turn allows for higher profitability.
Despite the aforementioned tailwinds, the US stock market gains are still largely driven by the Magnificent 8 companies, which trade at record-high valuations and have contributed to an unprecedented rise in the stock market concentration. These companies are anticipated to have tremendous growth opportunities arising from AI and data center megatrends, on top of existing rapidly growing niches like cloud computing, media streaming, SaaS, and others. Only time will tell whether the current valuations are fair; what is certain is that many industries have been struggling since 2022, as inflationary pressures followed by high interest rates and an increasingly tough labor market dominated by layoffs and scarcity of entry-level positions have put tremendous pressure on US consumers. The high financing costs have led to diminishing Capex appetite in many industries, leading to struggle in several market segments – perfectly illustrated by underperforming consumer discretionary and industrial sectors since 2022.
On top of harsh macro conditions in the last 3 years, the new “Trump 2.0” regime and his administration can be a threat for the healthcare sector. Trump is a notorious critic of the health insurance business and might create headwinds for it through attempts of deregulation and efforts to cut the government financing of healthcare programs. As a result, the healthcare sector relative to the overall market is at record lows comparable to the 2008 depression. All in all, despite apparent optimism in the market, there are pockets of underperformance and many companies trading near their 52-week low, which may present compelling opportunities to acquire good companies at attractive prices.
Our Methodology
We screened 30-40 stocks with at least $1 billion in market cap that are near their 52-week lows. Then we sorted them by open short interest as a percentage of outstanding shares and included the top 16 with the lowest open short interest in the article. Our belief is that a low open short interest implies a lack of bearish views on the business from leading hedge funds, which represents a bullish signal from a contrarian perspective.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 363.5% since May 2014, beating its benchmark by 208 percentage points (see more details here).
A close up of a satisfied customer talking to an insurance agent.
Selective Insurance Group, Inc. (NASDAQ:SIGI)
Short Interest as % of Shares Outstanding: 2.33%
Selective Insurance Group, Inc. (NASDAQ:SIGI) is a leading regional property and casualty insurance provider, specializing in commercial, personal, and excess & surplus lines. The company operates through a network of independent agents, offering tailored insurance solutions with a focus on risk management and superior customer service. With a disciplined underwriting approach and strong financial stability, SIGI balances profitability with growth.
Selective Insurance Group, Inc. (NASDAQ:SIGI) has been underperforming for the last 12 months, as the company announced declining retention and a weakening combined ratio. The performance was further negatively affected by inflationary pressures and losses from large-scale storms. During a difficult macro environment, smaller companies are the most affected ones, and SIGI certainly can’t operate at the same level of excellence and recession resistance as leaders like PGR. Arguments in favor of SIGI are that it has been a long-term outperformer of the overall market in secular bull markets, which confirms its ability to execute. Management announced that it remains comfortable with the quality of the underwriting portfolio and rate increases will be the main priority over the following years – as inflationary pressure subsides, SIGI is well-positioned to recover its profitability with subsequent rate increases. It appears that the bears’ reluctance to short SIGI confirms the short-term nature of the headwinds faced by the company.
Overall, SIGI ranks 7th on our list of the best 52-week low stocks to buy now according to short sellers. While we acknowledge the potential of SIGI as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than SIGI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.
