W. R. Berkley: The Silent Overachiever You Can Not Ignore

Let’s just say it straight: W. R. Berkley (NYSE: WRB) is one of the best-performing stocks you’ve probably never paid attention to. While everyone’s busy chasing the latest hype train, WRB has been quietly handing out 25% annualized returns over the last five years –  handily outperforming the S&P 500 by a wide margin. 

And here’s the kicker: it’s still reasonably priced, highly profitable, and one of the best hedges against market chaos we’ve seen in a while. This is a stock that not only makes you money – it protects you when everything else is falling apart. Being conscious of various market regimes to protect capital, is something we consider in our High-Quality portfolio, which has outperformed the S&P 500 and achieved returns greater than 91% since inception.

Image by Steve Buissinne from Pixabay

Let’s dive into the numbers that make the case for WRB loud and clear.

Scores Well On Essentials: Growth & Margins

WRB isn’t a one-hit wonder. This is a business that has grown at 13% annually – and we’re not just talking about the last 12 months. That’s the average growth rate over the past three years, too. On top of that, it has an operating margin of 17.5% and free cash flow margin of 25%. Pair that with disciplined underwriting and a conservative financial strategy that lets the business quietly hum along – and you’ve got a winner.

Your Portfolio Hedge That Actually Works

This might be WRB’s most underrated superpower: when markets crash, WRB shines.

Check out this track record of performance during market meltdowns:

• 2025 (YTD): S&P 500 is down 8% while WRB is up nearly 19%
• 2022: S&P 500 fell almost 20% but WRB was up 34%
• 2018: Market dipped 4.6% and WRB rose 6%

That’s not luck. That’s a pattern.

It is Cheap, And Cash Flows Prove It

Despite all this outperformance, WRB is not trading at a premium.

• P/E ratio: Just about 16 – very reasonable, especially given the growth and defensive nature.
• Free cash flow: $3.6 billion on a $28.3 billion market cap – that’s almost 13% free cash flow yield. Not a bad deal, right?

Let’s put that in perspective: you’re getting the kind of cash flow profile here that investors are paying double the multiple for elsewhere. This is the kind of undervaluation that screams opportunity. 

Nevertheless, investing in a single stock can be risky and WRB is not immune. It, in fact, fell nearly 25% between Nov 2022 and Jun 2023 – making it a significant underperformer in 2024 when everything else was going up. Consider diversifying away that stock-specific risk while riding the upside with our High Quality (HQ) Portfolio which, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride as evident in HQ Portfolio performance metrics.