Heritage Insurance (US:HRTG) ZACKS·2025-05-20 20:05Market Overview - Wall Street experienced a slight recovery after a red start, closing slightly green despite Moody's U.S. credit rating downgrade and warnings from JPMorgan's CEO about tariff complacency [1] - Factors such as tariff negotiations, trade deals, lower inflation, and strong earnings have contributed to the recent stock market rally, with expectations for continued strength into 2025 [1] Stock Performance and Strategy - Following a 26% rally in the Nasdaq since April, a period of calm and sideways trading may be beneficial, prompting investors to consider taking profits [2] - Investors are encouraged to search for strong stocks that are not overheated, focusing on those with great value and improving earnings outlooks [2] Value Stock Screening - The value stock screen utilizes Zacks Rank 1 (Strong Buys) or 2 (Buys) and targets stocks with price-to-earnings (P/E) ratios below the industry median [3] - The screening process also includes price-to-sales (P/S) ratios under the industry median and quarterly earnings rates above the industry median [4] Featured Stock: Heritage Insurance Holdings, Inc. (HRTG) - HRTG is a property and casualty insurance holding company with approximately $1.4 billion in gross premiums, experiencing a 670% stock price increase over the past three years, significantly outperforming its industry's 62% growth [5][7] - The stock is currently trading 14% below its average Zacks price target and at a 75% discount to its highly-ranked industry, aligning with its 10-year median at 7.4X forward 12-month earnings [7] - HRTG reported a substantial earnings beat in Q1, exceeding EPS estimates by an average of 363% over the past four months, with projected adjusted earnings growth of 61% in 2025 and an additional 13% the following year [8]