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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Selective Insurance Group, Inc. (XNAS:SIGI) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
SIGI
Name:
SELECTIVE INSURANCE GROUP, INC. (XNAS:SIGI)
Sector:
85.00M
Industry:
Insurance�Property & Casualty
CEO:
Mr. John Marchioni
Total Employees:
2,440
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -966.58% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF SELECTIVE INSURANCE GROUP, INC.(SIGI) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND INSURANCE�PROPERTY & CASUALTY INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
79.15
One Month Price Target:
$79.42
Six Month Price Target :
$80.76
Likely Price in One Year's Time:
Ticker:
$82.37
Likely Trading Range Today Under (Normal Volatility)
$78.88
Price Upper limit ($) :
$79.51
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$75.39
This week:
$70.75
This month :
$62.35
Other Primary facts
Market Cap:
4.80B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
60.33M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
14.48%
-19.71%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$96.58
$88.56
$61.72
$69.74
Medium risk (<10%) entry points
Buy Call
Sell Call
$85.95
Buy Put:
Sell Put:
$84.24
$72.33
$74.06
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
SIGI
Sharpe Ratio:
1.88%
Comparison:
SIGI, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is 36.19% higher than the industry
& is -17.39% lower than the market/S&P 500 average
Average Returns/Yield of
SIGI
Daily returns:
0.05%
Weekly returns:
0.26%
Monthly returns:
1.06%
Yearly returns:
10.43%
Comparison of returns:
Average annual returns/yield (last 3 years) is 21.65% above industry average
Classification:
SIGI, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.69
Statistical test of Returns:
SIGI has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.34%
Weekly Volatility:
5.22%
Monthly Volatility:
10.45%
Yearly Volatility:
36.20%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.74%
Volatility in last five trading days has been -68.45% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.75%
Weekly VaR:
-10.61%
Monthly VaR:
-21.22%
How Much Can the price of
SIGI
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-18%
Worst case (decline):
-73.52%
This translates to price declining to:
$64.77
This translates to price declining to:
$20.96
Severe Crash Probability
Risk of crash in next 6/12 months: High (50-70%)
What is Value at Risk (VaR)?
Risk Fundamentals
SIGI is a 49.80% riskier investment compared to the market/S&P 500 & is 28.33% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -2.96% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
SIGI
Beta in relation to market/S&P 500--0.61
Expected beta in 1 year's time:
0.561
Expected beta in 3 year's time:
0.793
Unlevered (debt free) Beta:
0.528
Beta in relation to Nasdaq (XNAS):
0.588
Beta in relation to all global stocks::
0.92
Beta Comparison & Analysis
Beta of competitors/peers::
0.957
Beta is -36.75% lower than peers
Average Industry Beta:
0.555
Beta is 9.02% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
11.79%
Sustainable growth rate is 2.25% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.054
Alpha is 55.11% above industry average alpha yield
Alpha is 343% higher than market/& is unsustainably high
Analysis of Cost of Capital of
SIGI
Equity cost of capital:
0.073
Equity cost of capital is 4.94% above industry mean WACC
Unlevered (without debt) cost of capital:
6.37%
Before-tax cost of debt:
5.73%
After-tax cost of debt:
4.53%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
4.53%
WACC is 8.42% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$56.96
Revenue growth rate per share of (3Y):
1.72
Annual revenue growth rate is -68.42% below industry average
EPS:
$5.62
Expected Annual growth rate of EPS (3Y):
12.48%
Expected future EPS growth rate is -20.11% lower than the Insurance�Property & Casualty industry
Free cash flow (FCF) per share:
$11.60
Balance sheet equity growth per share: 61.64%
Equity growth rate per share is 36.29% higher than the industry
Debt per share
$8.38
EBITDA per share
$8.66
Valuation Analysis Today of
SIGI
P/E Ratio:
18.57
P/E Ratio of Competitors/Peers:
15.29
P/E ratio is 21.51% higher than main peers & is 6.15% higher than the industry
Stock price/value with industry average P/E ratio: $98.33
SIGI is -19.51% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $46.24
Present value of the expected future dividends only: $21.29
P/S (Price to Sales ratio):
1.39
Price to sales ratio is -42.07% below the industry mean
P/B (Price to book value ratio):
1.72
Price to free cash flow: 6.82
Price to free cash flow ratio is -60.13% lower than the industry
Net income growth rate (3Y):
120.99%
Net income growth rate is -514.55% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 5.34%
Dividend yeild: 1.38%
Previous Dividend: $0.28
Previous adjusted dividend: $0.28
Previous Dividend: $1.09
Expected next dividend best case: $0.30
Expected next dividend worst case: $0.26
Average dividend payment (long-term): $0.25
Average dividend increase/decrease (growth rate) % per period: 2.07%
Expected next dividend payment date: 30/08/2022
Expected next dividend record date: 15/08/2022
Expected next dividend declaration date: 08/02/2022
Previous dividend payment date: 06/01/2022
Previous dividend record date: 16/05/2022
Previous dividend declaration date: 05/04/2022
Dividend History:
2022-05-13--$0.28
2021-11-12--$0.28
2021-05-13--$0.25
2022-02-14--$0.28
2021-08-12--$0.25
2021-02-11--$0.25
Dividend growth rate is -95.51% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
18.20%
Net debt to equity ratio:
18.18%
Debt to assets ratio:
4.90%
Net debt to assets ratio:
4.90%
Debt-to-asset ratio is -92.63% below industry average
Ability to repay debt:
Interest coverage ratio:
18.04
Interest coverage ratio is 274.67% more than industry average
Looking forward:
Debt growth rate:
-8.12%
Annual debt growth is 261% higher than industry average debt growth rate
Debt repayment rate in last quarter: 0.12%
Analysis of Key Statistics
Correlation of price movement with the market:
0.552
Statistical significance of correlation:
SIGI has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.6
Stock price is -8.01% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.6
Correlation of price movement with Nasdaq (^IXIC):
0.017
Covariance of price movement with the market:
0.023
Kurtosis
11.192
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.523
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
SIGI
Gross Profit Margin Ratio:
100%
Operating Profit Margin Ratio:
0.00%
-
Net Profit Margin Ratio:
100%
Effective Tax Rate:
20.17%
Effective tax rate is 0.94% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
12.63%
Return on equity (ROE) is 55.13% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
3.40%
Return on assets (ROA) is 122.06% higher than the industry
Financial Leverage:
1.1x
Current Ratio:
0
-
Cash Conversion Cycle (days):
0
-
The remaining useful life of property plant & equipment is: 5.2 years
Stock based compensation to net income ratio:
2.00%
In-depth Efficiency Analysis
Revenue generated per employee:
1.4M
Each employee generates 17% more revenue than industry average revenue per employee
EBITDA generated per employee:
214.2K
Each employee generates 7% more EBITDA than industry average revenue per employee
Profit generated per employee:
143.8K
Each employee generates 2% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
34.8K
Each employee generates -42% less free cash flow than industry average revenue per employee
Assets/Capital per employee
3.0M
Each employee generates -42% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
SIGI
SERVISFIRST BANCSHARES, INC. (XNYS:SFBS)
ENSTAR GROUP LIMITED (XNAS:ESGR)
HANCOCK WHITNEY CORPORATION (XNAS:HWC)
ITIQUIRA ACQUISITION UNT (XNAS:ITQRU)
BETTER WORLD ACQUISITION UNT (XNAS:BWACU)
GREENROSE ACQUISITION UNT (OTCM:GNRSU)
Brighthouse Financial, Inc. (XNAS:BHF)
AMERICAN NATIONAL GROUP, INC. (XNAS:ANAT)
KINSALE CAPITAL GROUP, INC. (XNYS:KNSL)
Current Analyst Ratings
Strong buy�0%
Buy�0%
Hold�25%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
3.44B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
-
884.69M
-
29.77M
29.77M
-
-
-
-
28.97M
54.21M
522.76M
-
350.90M
439.57M
88.67M
350.90M
Statement of Cash Flow
Date:
Period:
12.81M
Differed Income Tax :
-
Stock Based Compensation :
7.03M
Change in Working Capital :
- 26063.00K
Accounts Receivables:
- 66346.00K
Other Working Capital:
13.66M
Other Non-Cash Items:
42.57M
Net Cash Provided by Operating Activities:
92.68M
Investments in PP&E:
- 7677.00K
Net Acquisitions:
-
Purchases of Investments:
- 1819363.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
410.00K
6.86B
6.86B
1.64B
-
-
-
83.18M
7.85M
-
7.23B
-
-
7.32B
17.63B
10.31B
-
-
16.47M
-
-
-
505.57M
-
505.57M
8.04B
7.53B
209.34M
2.64B
- 129795.0K
- 141737.00K
March 31, 2022 at 6:00:00 AM
2.98B
2.78B
10.31B
14.09B
505.57M
505.2M
1.75B
- 15756.00K
- 95906.00K
- 612.00K
999.00K
- 5592.00K
- 18747.00K
-
- 23952.00K
-
- 27179.00K
17.88M
45.06M
92.68M
- 7677.00K
85.00M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
SIGI
2023
2024
2025
2026
2027
$104.99
$109.26
$113.70
$118.33
$123.14